Did you watch our Q2 Roundtable featuring Darius Dale of 42 Macro, Brent Kochuba of SpotGamma, and Tony Greer of TG Macro over the weekend?
If you’re still slacking, here’s a highlight from the fantastic conversation
Darius asks Brent about the institutional use of 0DTE options & the future of these strategies ☟
☞ Watch the attached clip to hear the answer straight from Brent
σ Darius recognizes that a large chunk of institutional money management has flooded into using 0DTE instruments as a way to hedge assets.
So, Darius questions…
Are we going to see a return to term hedging and a natural bid for skew in markets?
If so, like, what’s the catalyst for that?
σ Here is Brent from Spotgamma’s thoughts…
Brent highlights the growth of zero DTE strategies in Q4 and their stabilization since then.
Suggesting that they’ve likely maxed out.
Brent goes on to say he thinks 0DTE worked well for idiosyncratic risks – like hedging the CPI number or FOMC announcements.
But when faced with more systemic risks, like the recent bank crisis, the demand for longer-dated options spiked.
And the percentage of 0DTE subsided.
σ Brent says this 0DTE phenomenon has everyone partying today without worrying about tomorrow.
But when real risks emerge, there will be an initial washout.
With retail investors who are consistently short on these strategies getting blown out by the Vega trade.
➠ There’s tons more to unpack in this unparalleled conversation.
Keep an eye out for more insights from your trusted Macro Avengers, and watch their full Q2 Roundtable right now!
➠ Recession? Credit Crunch? What’s Next for 2023? | Q2 Roundtable with the Macro Avengers ↴
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