WTF?! Will 0DTE Cause Gammageddon? With Mike Green and Craig Peterson

The Derivative

WTF is “Gammageddon”? What do 0DTE options have to do with it? Should I be fearful? Should I be greedy? We’re getting into all of it in this episode where we dig into just what zero days to expiry (0DTE) options are, who’s trading these things, who’s on the other side, and why (and why not) any of it could matter to investors… to option traders…..to the VIX. On the latest episode of Derivative, Jeff talks with Mike Green and Craig Peterson about what is really happening down in the options weeds as the industry’s newest product makes headlines.

During the discussion, the trio covers a range of topics, including why quarterly options may be better than annual, weekly better than quarterly, and of course, daily better than weekly. They talk the decay of options, the participation of retail investors, the ins and outs of gamma hedging, and the similarities between selling calls and selling puts. They also explore the dynamics of gamma explosion and risks involved in trading something which expires before it clears (WTF indeed). So, sit back, relax, and tune in to WTF! GAMMAGEDDON? — SEND IT.

Chapters:

00:00-01:30 = Intro

01:31-12:54 = Tier 1 Alpha, ODTE defined, are we barrelling towards Gammageddon?

12:55-26:15 = ODTE options: Who’s buying, who’s selling? & it’s exposure to risk

26:16-41:49 = Do ODTE options dilute the VIX, is it really broken?

41:50-51:41 = GEXs & Gamma: bring on the noise

51:42-01:03:22 = How does it all end? Comparisons of trading volumes

01:03:23-01:06:53 = Crypto Victory Lap?

From the episode:

Charts in order during episode

Previous episodes with Mike Green:

Straddles, SVXY, and (GAMMA) Scalping with Logica’s Mike Green

Hedge Funds vs ETFs, Passive vs Active, 70s Inflation vs now, & Commodities vs CTAs with Simplify’s Mike Green

Follow along with Mike on Twitter @profplum99 and Tier1 Alpha @t1alpha

Don't forget to subscribe to The Derivative, follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.

Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer