Markets entered last week on fragile footing. In our previous Sunday note, we emphasized how negative dealer gamma, extreme put skew, and heavy 0DTE options activity set the market up for a trapdoor scenario. This created a market structure vulnerable to sharp drops and spikes in volatility, as we saw play out last week. The dramatic […]
Compass
The Options Market Trapdoor
Over the past week, the topic of volatility has returned to the forefront. While the market has been largely range-bound, underlying support remains tenuous. Simultaneously, traders have begun more actively paying for downside protection. Given the backdrop of flaring geopolitical conflict, we see assymetric downside risk forming as trader uncertainty and negative gamma threaten to unlock the […]
Right Tail Risk Is Building in the S&P 500
The market spent most of last week locked in the SPX 6,800–6,900 range that has largely held since Thanksgiving. Wednesday’s VIX expiration and Friday’s monthly OPEX defined the week’s rhythm, while negative gamma positioning and elevated single-stock put demand maintained pressure under the surface. Our historical OPEX data suggests the market is positioned for a […]
What Caused the Market Selloff Before the Headlines — And Why Most Traders Missed It
Key Takeaway: On April 23, a trader or group unloaded 37,000 SPX call contracts in under 30 minutes — a massive move that helped wipe out billions in market value and trigger an 81-handle selloff. It looked bullish. It wasn’t. This was a synthetic short, a hidden bearish bet most traders misread completely. Why? Because […]
Spot the Flow, Seize the Edge: 5 Options Signals Every Trader Should Be Watching
The Tariff Deadline (4/2) is looming, with big implications for your trading. This wildcard event could tip sector flows, shift hedging activity, and force institutions to adjust — fast. Yet this market catalyst comes with its own set of risks and opportunities. The difference comes down to how well you can see a setup before […]