Last week began with fear dominating market sentiment: analysts widely attributed Tuesday’s 2% SPX selloff to Greenland worries and tariff threats. As we pointed out in last weekend’s newsletter, traders had begun hedging against downside risk as put skew increased and volatility premiums rose. However, the quick turnaround back to SPX 6,900 seemed to erase any […]
volatility
Defensive Positioning Emerges as Market Rallies
Traders Turn Defensive In the Face of Market’s Climb SPX tested fresh all-time highs last week, with positive gamma providing guardrails for the broader market. In the face of headline noise—from criminal investigations into Powell to Iran-related escalation—the market absorbed every dip, with the 6,890 Risk Pivot level from Monday’s AM Founder’s Note holding firm. However, increasing put skew and […]
Vol Stays Quiet as SPX Reaches All-Time Highs
Strong 0DTE Support Lifts the Market to Record Highs The S&P 500 kicked off 2026 by grinding through a week of macro data releases to finish at fresh all-time highs on Friday. SPX closed at 6,966, up from the 6,902 open on Monday, after finding critical support in the 6,890–6,900 zone multiple times throughout the […]
Volatility, Correlation & Dispersion: SpotGamma on “The Market Huddle”
In this episode of Huddle +, Patrick Ceresna chats with Brent Kochuba, the founder of Spot Gamma, to break down the forces driving recent market volatility. They delve into the nuances of gamma and the dispersion trade, offering actionable insights for investors. Whether you’re a seasoned trader or just curious about the mechanics behind market […]
Nomura on the August JPY Carry Trade/Volatility Shock
This podcast episode features a conversation with Charlie McElligott, a cross-asset macro strategist at Nomura. The discussion revolves around recent market volatility, particularly the significant selloff and shifts in volatility dynamics. McElligott explains how the flattening of the skew, a measure of demand for downside versus upside protection, and the bid on volatility of volatility […]
Why Does Record Low Stock Correlation and Volatility Matter?
Understanding Correlation and Volatility in the Stock Market Introduction This video sheds light on the concepts of stock volatility and correlation, particularly focusing on how correlation metrics influence market behavior and volatility trends. This post will summarize the key points discussed, emphasizing the impact of correlation on volatility and market dynamics. Correlation Metrics and Their […]
S&P 500, Correlation & Low Volatility: The Big Trade Underneath the Strangely Calm Surface of the S&P 500 | Odd Lots
In the latest episode of Odd Lots, Tracy Alloway and Joe Weisenthal explore current market conditions, emphasizing the interplay between dispersion, correlation, and volatility. The episode, recorded on June 13, highlights how the S&P 500 has consistently shown upward momentum, albeit with minimal daily gains. The discussion introduces the concept of the dispersion trade, which […]
Why is the VIX So Low? Structured Products Offer an Answer
Equity market volatility (VIX) has been surprisingly low in 2023 despite uncertainty about interest rates and geopolitics. Some attribute this to the rise of short-term “zero-days-to-expiry” (0DTE) options trading. However, a recent article by the BIS argues that 0DTE trading is unlikely to be the main cause for low VIX and provides an alternative explanation: […]
Gamma Levels Can Reveal Huge Forces Driving The Nasdaq
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 […]
Will The Fed Push Stocks Over The Edge Next Week?
The following is a guest post courtesy of Michael Kramer of Mott Capital Management. Hard Landing Worries Are Driving Volatility Volatility in the market has been high as traders and investors look to hedge risks associated with the Fed and the potential for an economic slowdown. The concerns seemed to evolve, starting with inflation and growth worries. Now […]
