The following is a guest post courtesy of Michael Kramer of Mott Capital Management. The equity markets have had sharp drawdowns and extremely high volatility in 2022. While this dynamic has created a difficult backdrop for traders, the options market is playing a big role during these tricky times and SpotGamma indicators may provide an […]
put wall
‘Call AAA’: Santa Claus Is Having Sleigh Troubles
Through an options market lens, the following text will add color to some recent market movements.
The Theory Behind Put Walls
For this example, 2900 in the S&P500 is identified as a strike with large put interest in SPX options. The theory behind Put Walls: We make an assumption that most of those puts were bought by hedgers, therefore market makers and dealers are short those 2900 puts. As a result they must short sell stock […]