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As we move forward this week into spreads, we'll match option structures with first-through-third order risks. Today's pain is sponsored by: Vanna, Volga, Zomma & the fact that @ksidiii & his partner are off-the-desk

When you see clusters of dealer long strikes near-the-money and clusters of dealer short strikes above-the-money The position MMs are hedging is starting to flip— from what we'd call "short Skew", to long. This impacts realized & implied vol, and spot-vol correlation🎯

Short iron condor? Nope! Flip the script— today the customer is long, ICs are known for defined risk (cost of structure) and a capped payoff potential. For a market maker, the hedging of a tight iron condor is minimal— unless the index moves into the strikes 👀

When structuring options trades, you can use greeks to understand your own risk- -or, you can use your understanding of these greeks to exploit the hedging flows of options dealers. For example- today's erratic price action reflects negative local gamma. But eventually,

you're going to want to brush up this weekend. instructions for free cohort inside- will run again starting Monday. come along. learn what I look at: optionsdepth.com/app/sign-up?vi… join OptionsDepth. add your email: volsignals.com/optionsdepth thank me later 🍻