The OPEX Effect

• Vol Is Crushed. Risk Isn’t | What the Largest OPEX In History Tells Us About What Comes Next

  In this month’s OPEX Effect, Brent and Jack break down the September OPEX, which may be the largest ever. With volatility deeply suppressed, a record call skew, and the Fed meeting coinciding with VIX expiration, markets are set up for potential fireworks. The conversation explores how derivatives flows shape equities, why this expiration could be a turning point, and what investors should watch around key levels like 6,500.Topics CoveredRecord zero DTE volumes and their market impactWhy September OPEX may be the largest expiration everThe “vol pop zombie hunter” theme and what it signalsHow option dealer hedging drives equity flowsThe correlation between gamma positioning and volatilityMacro dynamics: rate cuts, liquidity, and potential bubble parallelsWhy call skew is extreme but call prices remain lowHow suppressed implied vol sets up risk of a volatility spikeThe VIX futures curve, ETF flows, and market dislocationsKey levels to watch: 6,500 and beyond for downside riskTimestamps00:00 – Zero DTE dominance and setup into September OPEX02:00 – “Vol Pop Zombie Hunter” theme explained06:00 – How options flows translate into equity moves11:00 – Options expiration cycles and turning points16:00 – Largest expirations and potential market reversals20:00 – Extreme call skew and positioning risks28:00 – Sector positioning and the lack of call demand33:00 – Correlation lows and implications for market breadth37:00 – Realized and implied volatility at historic lows43:00 – VIX futures curve, ETFs, and contango dynamics50:00 – Risks below 6,500 and the role of JP Morgan’s collar53:00 – The destabilizing effect of disappearing zero DTE flows

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• Low Volatility Is Lying to You | What the Options Market Says About What Comes Next

  In this episode of The OPEX Effect, Jack and Brent dive deep into the current market dynamics, exploring what they call the "Honey Badger" and "Zombie" market phenomena. With options volumes hitting record highs and realized volatility at basement levels, they analyze whether we're heading into a 2017-style low-volatility grind or if a volatility spike is imminent. The discussion covers everything from the latest options positioning data to the impact of zero-DTE trading on market behavior, providing valuable insights for both short-term traders and long-term investors.Market Rally Analysis - Comparing the current 4-month rally (25%) to post-COVID gains and why it feels more orderly than expectedThe "Honey Badger" Market - How the market has been buying every dip regardless of negative headlines like tariffs and policy uncertaintyOptions Volume Records - Breaking down the explosive growth in options trading and its impact on underlying stock flowsRealized Volatility at Extremes - Why hitting 6% realized vol signals potential for major volatility expansion aheadThe "Zombie" Market Theory - Drawing parallels to 2017's low-volatility environment and what it means for positioningOptions Positioning Data - Current expiration analysis showing surprisingly average positioning despite market highsTech Calls Opportunity - Why tech sector calls are at their cheapest relative levels in nearly a yearMarket Maker Hedging Flows - How dealer gamma positioning creates "strait jacket" effects on market movementJackson Hole & Rate Cut Expectations - Upcoming catalysts and why the market is pricing in 91% chance of rate cutsNew Tool Launch - Introduction of Flow Patrol, a daily PDF report tracking proprietary buy-side positioning data00:00 - Introduction and market rally discussion01:18 - Honey Badger market concept explanation05:05 - Options volume impact on equity markets10:05 - Hedging flows and market dynamics12:00 - Historical options expiration patterns16:00 - Positive gamma and "Chinese finger trap" markets18:00 - Current expiration positioning analysis24:00 - July predictions review and honey badger emergence33:00 - The zombie market theory and realized volatility extremes43:00 - Friday market action and volatility pricing analysis47:00 - The "spasm" effect and correlation dynamics52:00 - Forward-looking events and zombie market continuation57:00 - Investment recommendations: puts and tech calls59:00 - Bubble detection through options pricing1:04:00 - Flow Patrol tool announcement and wrap-up

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• All-Time Highs. Record Complacency | What the Options Market Tells Us About What Comes Next

  Markets are sitting at all-time highs, but under the surface, the options market is flashing signs of extreme positioning. In this episode, Brent Kochuba of SpotGamma returns to break down the latest options expiration cycle and what it could mean for stocks going forward.We discuss why record call buying, minimal hedging, and low implied volatility are creating a potentially fragile setup — and why upcoming events like CPI, VIX expiration, and tariffs could act as catalysts. Whether you're a long-term investor or a short-term trader, this conversation offers a deeper look at how positioning, dealer flows, and volatility pricing impact market behavior.Topics covered include:Why extreme call skew signals crowdingThe importance of gamma, vanna, and charmHow options flows can drive short-term market movesThe "window of weakness" around OPEX and VIX expirationThe role of tariffs, CPI, and macro catalysts in this setupTactical implications for investors and traders

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• A Rally Built on Fragile Ground | What the Options Market Tells Us About What Comes Next

  In the latest episode of the OPEX Effect, Jack Forehand and Brent Kochuba dive deep into the dynamics shaping the current market regime, with a particular focus on the upcoming June OPEX, dealer positioning, volatility trends, and the surprising resilience of the S&P 500 amid geopolitical stress. They break down how options flows continue to dominate equity price action, why the market remains pinned despite negative news, and what might finally break the calm. With some of the largest options expirations in history on deck, this is a must-watch for anyone following volatility, hedging flows, and macro signals.💡 Topics Covered:Why volatility often contracts before OPEX and expands afterThe significance of the June 2025 OPEX as potentially the largest everDealer gamma, hedging flows, and what they signal about near-term volatilityWhy implied vol is so low despite major geopolitical risk (e.g. Israel-Iran conflict)The JP Morgan collar trade and its influence on the 5,900 level in the S&PHow zero-DTE options impact market stability and risk signalingA potential regime shift: AI stocks, “taco trades,” and declining liquidityWhat vol metrics like VIX, VVIX, and correlation are really sayingThe hidden risk of overconfidence when markets ignore bad newsBreakdown of sector-specific volatility expectations (tech, energy, gold, Bitcoin)

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• The Rally No One Trusts | What the Options Market Tells Us About What Comes Next

  In this episode of Excess Returns, Jack Forehand and Brent Kochuba from SpotGamma break down the forces at play beneath the surface of the market as we head into the May 2025 options expiration (OPEX). While the S&P 500 has rallied hard, a deeper look at positioning, liquidity, volatility, and sentiment reveals a market on a potentially fragile footing. From the continued explosion of zero DTE options to concerning signs from liquidity metrics, this discussion explores how short-term positioning could dictate major moves—and why the post-OPEX landscape may not be as stable as it appears. Plus, yes… we finally explain the "Saul Goodman" reference.🔑 Topics Covered:Why May’s OPEX setup is lopsided with call exposure—and why that’s dangerousThe eerie lack of downside hedging despite a big market rallyHow zero DTE options and mean reversion flows are masking real volatilityThe dangerous illusion of low realized vol vs. wide intraday rangesWhy poor liquidity is a potential precursor for the next volatility eventAnalysis of SPX vs. SPY positioning—and which one signals more riskThe “Saul Goodman” signal: What it means and why it might be a contrarian tellWhat the data says about a potential flip post-OPEXJune expiration on deck: Could it be the next volatility catalyst?

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