Goldman Retreats From Options as Stock Derivatives Trading Struggles An unusual calm in markets has

Read up on delta hedging. It can exert profound buying / selling pressure on a stock.

 

For delta hedging to have an impact on the underlying you need rebalancing flows that are a large portion of volume. Something like that is unlikely in automated OMM business that’s geared mostly toward picking off retail flow. You do, however, see that type of effect when dealing with chunky hedge fund flow or (especially) corporate derivatives.

 

Yeah, definitely not all stocks, and definitely not all the time. The key here is recognizing that imbalance and taking the opportunities as they arise. And also to catch on when forces bigger than delta start moving the price and get out of the way. Which circles us back around to why Goldman getting out of options shouldn't be a reason for retail to get out.

 

If anything fewer market makers might increase the opportunity for supply demand imbalances.

 

Thanks. But what should I be looking for? Underlying PA and options volume?

 

Recently read an article on how "robots" (AI) will take over many of these functions to reduce costs.

 

Hedgies always get picked off.

Delta doesn't really do it, but they do hide prop positions since the regulations became effective. Not really surprising.

This article is basically a lie, because Goldman has tons of subsidiaries they can use without officially being in the business.
They do that all of the time.