Deepoptions04
Deep Options 04 Markets Do Not Move Because People Are Bullish Markets Move Because Dealers Must Hedge Deep Options 04 Markets Do Not Move Because People Are Bullish Markets Move Because Dealers Must Hedge Most traders grow up believing markets move because opinions change. News comes out, sentiment shifts, buyers appear, sellers react, and price moves. It is a clean narrative. It is also incomplete. At the options level, many large moves do not begin with opinion. They begin with positioning. This is one of the hardest mental transitions for traders to make. You stop asking what people think. You start asking what people must do. And the answer often sits inside gamma exposure. When traders buy options, someone must sell those options. In most cases that counterparty is a dealer. The dealer is not trying to predict direction. The dealer is trying to remain neutral. That neutrality requires constant adjustment. Every option sold creates sensitivity to price movement, and dealers offset that sensitivity by trading the underlying. This is where gamma begins to matter. Gamma measures how fast directional exposure changes as price moves. When dealers are long gamma, their hedge moves i
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