Gamma Flip Suggests Stock Serenity. For Now

Gamma Flip Suggests Stock Serenity. For Now

Things have calmed down. For now. In a year defined by uncertainty and cross-asset turmoil, the past several days felt comparatively serene. Since a cooler-than-expected CPI print triggered a boisterous rally on November 10, US equities closed +/- 1% on just one occasion (Tuesday). More to the point, the range has compressed meaningfully (figure below). The pale blue annotations in the visual mark the 194-point intraday reversal witnessed last month following September's CPI print, and the
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3 thoughts on “Gamma Flip Suggests Stock Serenity. For Now

  1. Prof Lucky – I went to B-school after a stint in the real world. We studied those semi-new fangled things called options in a second year class I took in 1981.

    That served me well when I went down to Wall Street. It was surprising how few people there had even an inkling how they worked. Even with warrants and convertible bonds having been around for a while. Gave me a leg up though I cannot boast of my meager level of understanding of the instrument at the time.

    Despite that, over the next ten years I gained some decent experience on the market-maker/book runner side.

    But truth be told, I’ve learned a lot more trading some puts in my PA during the last year. That would be hard to teach.

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