This is a pretty long analysis from a WSBets guy, who has been right twice in the last few days. He predicted heavy selloff for Friday, but midday reversed because he monitored option volume and he saw a reverse. Not to be an alarmist, so let's discuss his study:
Why do people come up with “analysis” but never look at the numbers. These moves weren’t options/vol products driven at all - you can simply look at the volumes and compare that to the outstanding gamma.
so i would like resident options experts to help me understand this bit: ‘during a downturn, firms want to hedge using puts and become short gamma’ you end up short gamma buying protection?
Or the opposite, dampen them, depending on the direction of the dealer positions which are very hard to figure out. My point is that either way, the volumes going through the markets are order of magnitude higher than the sizes of delta rebalancing even if you assume that the outstanding interest is one-sided.
The Forex markets look healthy, I'm actually killing it because of all the stupidity running amok nowadays.
And the futures are locked limit down after Donnie forcing the Fed to cut the rate. Panicky move, market not likey.
They should have held off on these two "emergency cuts" until Wednesday. Boneheads! It was just 2 weeks away from the first cut! Don't they have anyone there who knows the financial system, and is good at it? (Oh, apparently not.)
OK, the plot thickens. On Reddit WSBets went private for an hour or so and the OP of the analysis suddenly disappeared. Here is the discussion, make up your own mind about it: