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More from @MenthorQpro

Menthor Q

@MenthorQpro

Mar 29

1/ What Is the Volatility Smile? 📈😐📉
The Volatility Smile is a U-shaped curve that shows how implied volatility (IV) changes across different strike prices within the same expiration.
It reveals market sentiment, tail risk, and trading opportunities—let’s break it down. 🧵👇

2/ Why It’s Called a “Smile” 😬
When plotted, IV is lowest at the ATM (at-the-money) strike and higher at both OTM (out-of-the-money) calls/puts and deep ITM options—creating a smile-shaped curve.
This reflects the market pricing in greater risk for big moves in either direction.

3/ What Does the Smile Tell Us? 🧠
🔹 High IV in OTM options = Market expects tail risk (sharp price swings).
🔹 Low IV near ATM = Lower perceived risk near current price.
This pattern often shows up ahead of earnings, events, or market uncertainty.

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Menthor Q

@MenthorQpro

Mar 23

1/ Weekend Workflow. Preparation for the week

Here’s a structured approach to prep for the week ahead. The aim is to map out the key levels and flows that could drive markets—where the market could stick, accelerate, or reverse.

Let’s break it down step by step 🧵

2/ Start with Options Positioning & Volatility Path

• Identify where the large open interest is sitting.
• Look for gamma pockets: zones where dealers may face pinning or hedging pressures.
• Watch for potential negative gamma landmines that could create volatility.

Check skew: Is the market pricing in tail risk or getting complacent? Put skew will often show if downside protection is in demand.

3/ Think Through Delta Flows

• Map out levels where dealer hedging could flip.
• What strikes could force dealers to buy dips or sell rips?

Always factor in how changes in implied volatility could amplify or dampen these flows. Low IV often leads to stickier price action; high IV can fuel sharp moves.

Read 8 tweets

Menthor Q

@MenthorQpro

Mar 1

📊 Trump, Fort Knox & Gold – What’s Going On?
Trump claims Fort Knox may be empty, raising doubts about U.S. gold reserves. If true, this could shake confidence in the dollar and send gold soaring. 🏛💰🧵

2/ The Fort Knox Controversy & U.S. Gold Reserves
🔹 Trump claims he "wouldn’t be surprised" if Fort Knox is empty.
🔹 Officially, the U.S. holds 8,100 tons of gold, mostly at the NY Fed.
🔹 If reserves are missing, it could shake global faith in the U.S. financial system.

3/ Why Gold Could Be Massively Undervalued
📊 Fort Knox gold is worth ~$430B, yet global central banks hold $3T in gold—just equal to Microsoft’s market cap!
📉 Gold makes up only 0.5% of global financial assets, meaning a revaluation could drive exponential price growth.

Read 8 tweets

Menthor Q

@MenthorQpro

Feb 23

1/ 📊 How can you predict market moves with volatility?
Traders often struggle with setting realistic price targets. The 1D Expected Move Indicator helps forecast daily price action, giving upper & lower bands for expected movement. Let’s break down how it works & how to use it in trading. 🧵

2/ 🔎 What is the 1D Expected Move Indicator?
A proprietary volatility tool designed to estimate the next day’s price range based on historical price action and implied volatility. It provides:
📌 1D Max Move → Expected max price movement.
📌 1D Min Move → Expected min price movement.

3/ 🚀 Key Benefits for Traders
✅ Risk Management – Helps set realistic expectations & stop-loss levels.
✅ Trade Execution – Useful for defining strike prices for options.
✅ Reversals & Pullbacks – Price breaking above 1D Max often retraces back.
✅ Spread Trades – Helps structure spreads within expected price boundaries.

Read 7 tweets

Menthor Q

@MenthorQpro

Feb 15

📊 How to Trade Put Support Levels Like a Pro
1/ Ever wonder why prices bounce off certain levels or break down? It’s all about Put Support—a key zone where hedging flows dictate market moves. Understanding this can give traders a serious edge. Let’s break it down. 🧵

2/ What is Put Support?
🔹 It’s the strike price with the highest net put gamma, making it a major support zone.
🔹 Institutional traders hedge with puts—when demand rises, market makers short stocks to stay hedged.
🔹 As price nears Put Support, hedging flows determine whether price rebounds or falls further.

3/ Why Does Put Support Matter?
📉 If price bounces, put holders sell, forcing market makers to buy back hedges, creating a short squeeze.
📉 If price breaks down, traders roll puts lower, shifting support downward, leading to more selling pressure.

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Menthor Q

@MenthorQpro

Nov 30, 2024

1/ 📚Understanding Option Premiums

A thread 🧵

2/ Option premiums are the price you pay (or receive) to buy (or sell) an option. It’s made up of intrinsic value (real value based on the stock price) and extrinsic value (time value, volatility, etc.).

Let's break it down further

3/ Intrinsic Value:

It's the "real" value if the option were exercised today.

- For calls: Stock Price−Strike Price (if positive, otherwise zero).
- For puts: Strike Price−Stock Price (if positive, otherwise zero).

This how to think about the intrinsic value of a Call option

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