In this episode of the OpEx Effect, we discuss the current state of the market as we approach the May options expiration. We analyze the low levels of volatility and put demand, suggesting market participants are not too concerned about potential downside risks. We also examine the impact of key upcoming events, particularly the CPI report and NVIDIA earnings, and how they could influence market direction. Additionally, we explore the relationship between options activity and market sentiment and the importance of understanding these dynamics even for long-term investors.
00:00 Introduction
01:13 Reflecting on the charity livestream event
02:30 Current market conditions and low volatility
04:25 Upcoming CPI report and potential market impact
06:08 Importance of the options expiration (OpEx) cycle
09:20 Put-heavy expirations and market bottoms
12:00 April OpEx as a turning point for the market
14:10 Gamma levels and their significance
17:45 Difference between monthly and quarterly OpEx
20:00 Evaluating potential market weakness around OpEx
22:30 "Window of volatility" vs. "window of weakness"
25:20 Factors influencing post-OpEx volatility expansion
27:40 Unusual single-stock activity in GameStop and AMC
30:30 What moved the market in April?
33:00 Volatility term structure and its implications
36:00 Importance of the CPI print and potential market reactions
38:30 Cross-asset volatility and its implications
41:00 Call and put volumes in the current market context
43:20 Analyzing NVIDIA's option skew ahead of earnings
47:00 Value of options data for long-only investors
49:30 Identifying potential support and resistance levels
51:50 Wrap-up and final thoughts
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