Summary of TRACE 101: Live Demo & Real-Time Analysis | SpotGamma

Main Ideas and Concepts

• Introduction to TRACE

  The webinar is led by Brent K. from SpotGamma, introducing their new product, TRACE, which provides real-time analysis of market movements based on options flows.

• Gamma Map

  The Gamma Map indicates the current market condition, showing a positive gamma regime where dealers buy dips and sell rallies. It updates the SPX gamma position approximately every 10 minutes, providing insights into dealer positioning.

• Zero DTE Flows

  Zero Days to Expiration (DTE) options flows are significant, as they tend to influence market movements by selling calls during rallies and selling puts during declines. The webinar emphasizes the importance of monitoring these flows for market navigation.

• JP Morgan Collar Trade

  A significant collar trade by JP Morgan, involving 40,000 calls, is set to expire, which will affect market gamma positions and potentially lead to increased volatility. The speaker notes the importance of being aware of this trade as it may shift market dynamics.

• Stability Indicator

  The Stability Indicator measures market movement, suggesting that low stability (around 30%) indicates wider price ranges and potential volatility. The current high stability suggests a quieter market, but this is expected to change after the JP Morgan Collar Trade expires.

• Hero Flow

  The Hero Flow provides real-time insights into delta impacts based on options trades, indicating whether there is buying or selling pressure in the market. It helps traders assess how new options flows may influence market movements.

• Trading Methodology

  The session includes a checklist for assessing positions based on gamma by strike, support and resistance levels, and how to use the TRACE tool for trading strategies. The speaker discusses various trading strategies, including selling put spreads below support levels and monitoring key strikes for potential market movements.

• Future Outlook

  The speaker anticipates increased volatility in the coming week due to the expiration of significant options positions and the upcoming election.

Methodology/Instructions

• Using TRACE:
  • Monitor the Gamma Map for current market conditions.
  • Pay attention to Zero DTE Flows for insights into immediate market impacts.
  • Use the Stability Indicator to gauge potential market movements.
  • Analyze the Hero Flow for real-time delta impacts and adjust trading strategies accordingly.
• Checklist for Assessing Positions:
  • Start with gamma by strike to identify significant positions.
  • Determine support and resistance levels based on the Gamma Map.
  • Utilize the Stability Indicator to assess market movement expectations.
  • Consider the implications of major trades (like the JP Morgan collar) on market dynamics.

Featured Speakers/Sources

• Brent K. (SpotGamma)

Notable Quotes

— 03:02 — « Dog treats are the greatest invention ever. »

Category

Educational

Video