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Nomura’s McElligott: ‘You Cannot Overstate The Gamma Impact Of Single-Name, Mega-Cap Tech Options’
The flagging fiscal stimulus push in the US and escalating virus lockdowns in Europe are a "double-whammy" for the reflationary impulse inspired recently by rising odds of a Democratic sweep in next month's elections, but Nomura's Charlie McElligott said the talking point on the desk was more "simple" Thursday.
"You cannot overstate the Gamma impact on the overall market of those single-name, mega-cap Tech options expiring tomorrow," he wrote, reiterating points from earlier this week, when evi
I admit I don’t understand the dynamic here. I would have assumed that a lot of the hedging was by large institutional investors and that as expiries approached they would “roll” their hedges into longer dated options. It seems implausible they would leave themselves “naked” even for a short period of time. Even triple (quadruple) “witching Fridays” don’t inspire the sort of awe they used to. Does this imply the options market is swaying more towards traders and the market makers catering to them?
By “this” at the end, I meant McElligott”s analysis.