“Brent Kochuba Says One Stock Keeps Killing the Tech Rebound” — watch on tastylive.
Brent Kochuba, founder of SpotGamma, joined tastylive to cover why S&P 500 options repriced higher across the board, which level matters on the downside, and why the flows he tracks look little like crash positioning.
Oracle fell roughly 6% after another debt offering that arrived larger and sooner than expected, and the Nasdaq struggled for a bid even with WTI crude down about 6%. Brent Kochuba, founder of SpotGamma, joined tastylive to explain why index options got broadly more expensive after Friday’s selloff, and why SPX right tail risk looks under-owned in the positioning he tracks.
Credit Worries Keep Capping Tech
The offering matters less as a corporate event than as a reminder of where the worry sits, namely the credit funding the AI buildout and the neo-cloud names leaning on it. Each time tech gets its head above water, another financing need pulls it back under, and the group tends to struggle while the weakest parts of the rally break. The rotation has absorbed some of that pressure, with the equal-weight S&P 500 down around 70 basis points on Friday while the cap-weighted index and the Nasdaq fell harder.
The Whole Vol Surface Lifted
Friday’s repricing lifted the entire vol surface rather than one wing. Put skew — the extra premium traders pay for downside strikes over upside ones — did not lead the move, and implied volatility rose in both directions at once. That changes which structures make sense, because an outright long option carries a richer entry and more premium to give back once the week clears. Spreads and flies, which finance one leg with another, absorb that cost better than outright calls or puts.
Losing 7,600 Opens A 7,400 Test
The S&P 500 broke 7,600 on Friday, and that is where implied vol began to lift and the VIX gained sharply relative to the size of the index decline. A sustained loss of that level likely opens a test of 7,400, roughly 2% lower. Brent walked through short-dated put flies in SPX as his preferred hedge for that break, 50 to 100 points wide with the body near 7,400 and expirations midweek, since a fly caps what the hedge costs while vol is rich. The 7,700 area looks like short-term resistance, where 0DTE sellers of volatility have been active.
Apple Carries Little Event Premium
Apple reports after the close with midterms the following day, and the index options market is not pricing much for either. The SPX implied move runs about 55 points through the next session and 112 points through week’s end, a little elevated rather than defensive, with the VIX structure in the 19s. Apple has not committed to AI capex the way the hyperscalers have, so the double-digit drawdown risk that shadowed some of those reports looks smaller, and implied volatility tends to contract once an event passes.
Flows Look Little Like Crash Positioning
Friday produced little of the downside buying that usually accompanies a scare. The flow included an 11,000-lot February call spread in Meta, decent-size S&P 500 call spreads and only light put selling; a position that size bought to open reads more like an outright bet than a hedge. The index has also gone 102 sessions without a 2% drawdown, so it is not oversold by any conventional measure, which makes selling index puts harder to justify than selling them in the beaten-down mega-cap tech names. Brent sees the right-tail rally as the move most traders are least set up for, and expensive options make it awkward to chase.
We encourage traders to watch two things into the end of the week. The first is 7,600 in the S&P 500, since holding it keeps the rotation read intact while losing it puts 7,400 back in play. The second is correlation, measured by COR1M and COR3M, alongside the sectors the rotation has rewarded, because correlation lifting while staples, financials and energy roll over would mark the turn from an orderly rotation into something broader.
Brent Kochuba founded SpotGamma and contributes to tastylive. He was previously a portfolio manager at Seven North Capital Management, building options-based strategies, and a derivatives broker at Wolverine Execution, Credit Suisse and Bank of America.
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Gamma Guy with Brent Kochuba runs Tuesdays at 10:00 a.m. CT on tastylive.