Why Options Call Walls Cause Pinning | SpotGamma

Why do strikes with large amounts of options gamma cause resistance or pinning in the S&P 500? We believe it's due to large hedging flows and the passage of time.

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*Note: This presentation is intended for general information and entertainment purposes only. No mention of company names, trading strategies or illustrative examples constitute investment advice. SpotGamma advises you to seek investment advice from a licensed professional.

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[PeteBristolUK]

Excellent video - Monday should be interesting…

[ezprogramming]

@SpotGamma, how do you know if the market maker is on the long or short side of the calls?

[sergeyyatskevitch]

Thank you. Interesting presentation, but your thesis that the gamma consists mostly of the gamma bought by dealers, needs proof, or so it seems.

[zofg]

May I ask what is likely to happen when either the call or put wall gets breached if the gamma position isn't as strong? Does it still mean revert back down to the call/up to put wall levels? I have seen the put wall move up as a function of poor put interest. In this case, should weight be given to put walls that move up and should we depend on the put wall level in such cases/how should we use it in such cases?

[carlosmilochis]

Great video! Thanks for putting this together.

[JimTonicYT]

How do you know the dealers are long calls instead of short those calls? Or is this part a judgment call?

[nickjackson]

As the liquidity providers aren’t dealers net short? I feel I am missing something.

[QEDCap]

Hey mate, on a previous video you remarked that the JPM collar trade is likely to add a tailwind to the markets on Thursday and Friday as dealers need do neutralise their negative delta positions. On the PM note and this video you saying range volatility won't be so large.

Would I be correct in thinking about this as the heavy delta neutralisation will move the market much much less on Friday vs (for example) 3 months ago due to the variation of gamma over time? Almost as though the dealers can add to a huge position but not move the markets much?

[zofg]

May I ask which flow is more impactful on a general basis: SPX or SPY? If SPY options is showing a stronger flow upwards than the SPX equivalent, does it influence the SPX index? Chicken or egg first?

[MrMrPerfect]

When all that gamma is taken out of the market, what is usually the opening for the next week? Going past the wall or dropping below?

[jacobgarza]

Great video, how is notional gamma and notional delta calculated?

[micz]

This analysis aging like the finest of wines

[matthewokeefe]

Watching this video two years later (19jan24) the 4800 level is, again, a Call Wall! Although the market just blew through it is if it weren't there

[jeffreyluter]

Check out call wall of GNUS $1 call Oct 21st. Earnings on Aug 15th AH. How do you interpret that?

[scarfo]

awsome...if you cant make no money off this info, you dont need to be trading..

[dzi]

OK so where exactly was this impact of the 4800 call wall? I haven't noticed it. You may have some theory that sounds good, it may be even true, only it doesn't impact the market apparently.

[markjackson]

"gamma walls" aka the sensational She-Hulk!

[ashokvyas]

Confusing videos one after another. JPM collar video contradicts this video. Buddy you need to explain in plain words.
Too much gamma positive /negative doesn’t help…my 2 cents for new year 2022.

[Barabus-yxcn]

You did NOT coin that phrase "call wall" or "put wall". Us options traders have been saying that since the late 1980's.