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GammaEdge

@GammaEdges

May 4

We've taken the role that the dealers play in the market, specific to how they utilize the option Greeks & simplified the concepts into a relatable analogy:

Driving a car. 🚗

If you're easily confused about complex options terms & dealer dynamics, this thread is for you🧵

1/ Like using different inputs to the gas, brakes, and steering wheel based on traffic and road conditions, dealers use 'the Greeks' - delta, gamma, charm, and vanna - to navigate the market and manage risk.

Let's dive deeper into how these play out in real-world trading 👇

2/ As a refresher, dealers are not in the business of making money from predicting price moments.

Their role is to provide liquidity to the markets by facilitating transactions.

Therefore, they are focused on eliminating the directional risk within their portfolio.

Read 23 tweets

GammaEdge

@GammaEdges

Apr 20

A prevalent misconception is viewing +GEX as a "magnet" that attracts price.

It's more like a repellant—pushing price away until it's decisively overtaken. This is why it's a good strike to at least take partial profits at.

Here's why: a 🧵 ...

At the core of our analysis, we view options primarily as tools for speculation, not hedging.

+GEX represents the strike with substantial short-term OTM call bets from traders.

Underneath, this level repels price due to the nature of 'moneyness'.

1/ Remember: Moneyness Matters.

Call options opened above spot price are OTM and have a delta of less than 0.5.

Put options opened below spot price are also OTM and have a delta of less than -0.5.

Read 17 tweets

GammaEdge

@GammaEdges

Apr 14

🌇Good Afternoon Traders. Time to go around the horn and see what the structure on the #Mag7 stocks looks like for this coming week:

Before we get going on single stock structure, we should review the Market Trend Model, which is our tool to gauge trend/momentum in the market. We can clearly see that all trends are lower, with significant selling seen throughout the week. Caution is certainly warranted here, and we need to see improvement in this structure before any kind of conviction to the upside.

Additionally, let's take a quick look at $SPX. You'll notice the amount of red in the dashboard. This indicates that the bears are out in full force, dominating both above and below spot price. Again, caution is warranted, and we need to see significant improvement in structure before any kind of conviction to the upside.

$AAPL -> What was once living below its transition zone, now is not. Relatively strong end to last week in the face of prevailing general market headwinds (see $SPX and MTM post above). Price is now currently above transition zone and for the next month with call speculators targeting $180 being both +GEX and COI. Additionally, when looking at the GEX ratio, which is a measure of speculation, we can see that this has increased last week.

$TSLA -> Continues to be in a downtrend from the start of the year, which is confirmed via its GEX ratio, meaning we aren't seeing speculation to the upside.

When looking at structure through our dashboard, we can also see the lack of call speculators above spot price for the next month (note the red delta numbers above spot price (first column)). $170 has been -Trans in this name (currently ZeroGex) and key psychological number. Below here, and $160 is being targeted. We need to see structure improve to the upside before being interested in that side of the trade.

Read 11 tweets

GammaEdge

@GammaEdges

Feb 19

⚠️$SPX #0DTE Traders⚠️

We've emphasized our key levels a lot lately...

→ ZeroGEX
→ PTrans
→ +GEX

Why is that?

The market respects them more days than not...and they aren't random either. They're all derived from market structure.

Nothing fancy, just actionable insights👇

1/ Building on our focus, GammaEdge has dedicated significant time and resources to crafting visualizations of these key levels.

Today, we're sharing a behind-the-scenes look at a few of the most powerful commands from our discord charting bots available to $SPX #0DTE Traders.

2/ Command: $EM

A bread-and-butter chart of GE that displays our key levels overlaid on 1-min bars

Updating in real-time, this chart can be run at any point during the session (& pre-market!) to visualize:

1. How levels are shifting intraday
2. How price respects said levels

Read 10 tweets

GammaEdge

@GammaEdges

Feb 11

Most services out there like to complicate the market and their "signals" are a black box.

We do the opposite for you at GammaEdge.

If you find yourself nailing your $SPX #0DTE entries, but struggle with when to take profits, read this: 👇

We have straightforward targets for $SPX 0DTE trading.

We use to 2 levels:

1. Positive Gamma Exposure (+GEX)
2. Call Open Interest (COI)

*Bonus levels are quarter, half, or whole numbers (e.g., 4925/50/75, or 5000). Why? B/c price likes liquidity, which these strikes offer.

One note: If you've followed us for long enough, you know by now that trading within our transition zone comes with a lot of chop and it's best to wait for price to clear Positive Transition (PTrans).

Once this happens, why do +GEX and COI make sense as profit targets?

Read 13 tweets

GammaEdge

@GammaEdges

Jan 24

The 4 Key Levels You Need To Know to Profitably Trade $SPX 0DTE:

1. ZeroGEX
2. Positive/Negative Transition
3. Positive/Negative Gamma Exposure (+/- GEX)
4. Put/Call Open Interest (POI/COI)

Let's break down why each one is important, & how to trade these levels daily:

1. ZeroGEX is where dealer exposure is balanced in the market.

No bias in either direction.

Above this level we can be short term bullish.

Below this level wee can be short term bearish.

2. Positive Transition (PTrans): The strike at which that & all strikes above are Gamma Exposure Positive.

We use the PTrans level on $SPX as our primary upside entry point.

Couple this level with a consolidation in intraday price action & you have a trade on your hands.

Read 12 tweets

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