The gamma squeeze signature

If you want one signal that tells you a squeeze could be building, this is the one I'd use.

Spot and vol going up together.

Normally spot and vol move against each other, especially on the index. Market up, vol down. That relationship is so reliable that most of the vol surface is built around it.

But single stocks these days behave differently, especially the hot ones.

In a genuine gamma squeeze the relationship inverts. The stock rips. Vol rips with it. Both going higher together, because the buying pressure is originating in the options market itself and then transmitting into the stock.

That positive correlation is the fingerprint.

It's also what makes these squeezes so violent. The two effects reinforce each other. The dealer hedging that would normally cushion the move amplifies it instead.

When you see a single name where the calls skew is getting more expensive as fast as the stock is getting more expensive, you're probably not looking at a normal rally.

You can learn far more about my framework in my free 60 minutes masterclass, linked below.

Watch my free masterclass (exclusive for serious option traders)

If you want to skip the masterclass and jump straight into our course, the Options Insight Advantage, this is the link.

Jump straight into our course, the Options Insight Advantage