How 0DTE Options Are Changing The Game (Destroying The Market)

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[chucklong]

Finally someone else is talking about this!!

[willcarbone]

I tend to agree with your thinking that 0DTE options are causing volatility to be subdued in the short term. However, this seems to be building to a capitulation type selloff where the fed will be forced to make a tough decision regarding interest rate policy similar to Q4 FY18

[somejohndoe]

Wasn't aware of that, thanks for the heads up.

[GoldGn]

Im just waiting for the day these market makers meet justice . This is beyond criminal the way these markets work today, every session is a liquidity hunt behaving like is a crypto coin

[BatmanBoss]

Thank you for calling attention to this new threat buddy.

[silo_fx]

Really well explained. Iron condors for the win!

[makjagger]

Also to add, I've been reading alot of people saying this will be like the December of 2018 when Powell caused that flash crash (so if alot are short now anticipating the next leg down MMs will make sure to rip it up and burn them) also not trusting the stats on the put call ratios (as the MMs publish them lol)

[ananovo]

Unique and informative video, thanks Aaron!

[briansusi]

Social media is also fueling retail on this.

[barnyardbrio]

that's incredible. thank you for sharing

[Jerry-gilj]

Good analysis Aaron. For me it seems like this means that going forward I should focus more charts of individual tickers and not the major indices or ETF's. Avoid all groupings?

[scottwhitfield]

While I agree that 0DTE options are suppressing the volatility of the VIX index, I disagree that they are extending periods of consolidation significantly. There have always been periods of consolidation followed by periods of volatility; the greater the period of consolidation, the greater the subsequent volatility. Look at the period between July and August 2008 on the SPX, which mirrors where we are today - we moved sideways for nearly 40 days before the big move.

[makjagger]

Basically short term trades are screwed all the time because the algos will make sure to stop you out 🤦‍♂️😅

[merchantsailor]

I will complain to CBOE but unfortunately the regulators will not act until a black swan event, than its too late, very good insight totally agree, my perception with this do individual stocks and maybe forget the indices options markets, not sure if options trades on individual stocks would do better?

[nickjackson]

TA on the Vix ffs 🤦

Vix is a measure of 30D SPX options. The reason volatility has been suppressed is because vol is oversupplied.

[benjaminlord]

The issue sorts itself out when retail gets bored of options expiring with nothing to show except for premium paid? Wishful thinking?

[dsc]

Wow, very interesting Aaron. It wouldn't surprise me if they crashed it to pick up everything cheaper.

[cashbyclose]

$DXY needs to be on everyone's chart so you can see it moving to confirm you are right DXY Down = SPX ES SPY up DXY ripping up SPX ES SPY down. just scalp 10-20% gains with size and call it a day. 400$ a day average for the 251 trading days is 100, 400 a year scalp you way into freedom. nice video

[biscaynediver]

ODTE is the ultimate mechanism to transfer $$ from retail to pros. Nothing more than a binary gamble. Doesn't matter how long the accidental win streak is, ultimate, double-down, double-down winds up with the loss and poof, all gone.

[Buckaroo]

I don't think 0DTE really factors into this consideration. It's about the failing of BLack Scholes/MOnte Carlo imo.