0DTE Options, Fixed Strike Vol and the Impact of Options Expirations with Brent Kochuba

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There has been a lot going on in the options world that is impacting the stock market. The use of 0DTE (0 days to expiration) options has risen dramatically in recent months, options expirations have continued to be significant market moving events and an end of month trade by a JP Morgan fund many investors haven't heard of has also been a significant market driver. We also have a major options expiration coming up this week that might have significant implications for the market.

With everything going on in the options world, we thought it would be a great time to bring back our friend and options expert Brent Kochuba. Brent is the founder of SpotGamma and has been our go to resource to understand how what is going on in options is impacting the overall market. We cover all the issues above and get Brent's take on what they might mean for investors. He also shares some great charts with us to help us better put everything into context.

00:00 - Intro
02:22 - What are 0DTE options and what do they mean for the market?
07:06 - Who are the primary users of 0DTE options?
09:22 - Is 0DTE use taking away from options in further out expirations?
10:25 - Does the rise in 0DTE option use increase tail risk for the market?
14:58 - How long-term investors should think about the rise of 0DTE options
16:22 - What does the VIX measure?
19:00 - Does the rise in 0DTE option use distort the VIX?
22:15 - What is fixed strike vol?
28:21 - What Brent looks at to measure volatility
30:36 - Is rising volatility in an up market a warning sign?
33:29 - What Brent is seeing in this week's options expiration
36:36 - What are the common characteristics of market moving options expirations
39:06 - Why the options expiration flip trade has stopped working
46:23 - What Brent is seeing in individual name options
52:55 - What is the JP Morgan collar trade?
01:00:55 - What the JP Morgan trade means for investors

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Thank you for checking out Excess Returns. If you found this video valuable, please like it 👍, leave a comment ⌨ and subscribe to our YouTube Channel 💥

ExcessReturns
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Love the mix of short term signals with the value guys. You guys are on fire lately. Keep up the amazing work.

tanney
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There is ZERO "mean reversion" to the downside. Where are you seeing that? It spikes upward constantly....love ya Brent but it's up-only.

markjackson
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47:31 Brent let me buy you a haircut and shave brother youve got too much hair on your head! 😆 my man's a straight werewolf!

markjackson