I have the same questions. Two videos seem to be contradicting themselves, unless I'm missing something.

This is correct regarding Tradytics, however with Vol.land they actually take a step further and did a lot of proprietary work in figuring out all of the flow in between which leads to some deeper insights that you wouldn't otherwise see. Both can be very helpful though! And despite Tradytics focusing on bid/ask, they still take it a step further than sites such as SpotGamma that assume all calls are long and all puts are short, which can be misleading.

@@FattyTrades thanks , the spotgamma assumptions can work for low vols. environment but in high vols. It does not make any sense. ( I know you are thinking , it should be reversed ). So what kind of other things Volland did behind the scenes. , any idea ?

@@FattyTrades bro sounds like Ime Udoka new houston rockets coach lol

None that I’m aware of. However, a book based on dealer positioning would be insanely helpful.

Yes it really depends on the amount traded on the asset which you can see on the summary page. Anything that is 1% or more than the amount traded on that summary page will be very significant. I’ve seen some positions be as large as 60% which is abnormal but happens

Haha i was going to avoid it myself then WizOfOps showcased the Dealer Hedging Requirement Summary and I couldn't resist. On top of that, I finally have a way to view the most accurate Vanna readings which is HUGE.

The Volatility S&P500, especially when trading SPX/ES/SPY & the top holdings of the S&P500 since it gives insight into the volatility of the SPX options chain as a whole within a specific date range.

There is but I have found it to be inaccurate on Tradytics because of the way they do their calculation. The only service I’ve found with accurate Vanna is vol.land which is why I use them.

Hi and sorry for the delayed response, I took some time off and am finally getting back into things. This is definitely high on the list of things to cover!

Tradytics tries to determine directional bias on dealer positioning by looking at options that occur on or near the bid/ask price and then ignoring the data that doesn't fall clearly on one or the other. This is still advantageous compared to many other services that just assume all calls are long and all puts are short, however can have some inaccuracies. Vol.land takes this further by using their proprietary algo to help make since of all those contracts that fall in between. It can lead to a clearer picture and can catch things that might've otherwise be missed. Despite this, no service is perfect and I love them both for different reasons. When talking just dealer data, Vol.land will give the most accurate picture. But it's lacking in other areas such as pointing out the assets getting the most flow, dark pool levels that can often times correlate incredibly well with the most notable price levels, and some other interesting insights offered by Tradytics. Anyway, I hope this helps clarify why there are differences!

Well the most accurate way to determine if dealers are long or short is with deltas, which is worthy of its own video. However, that’s for the initial position and hedging requirements change based on spot price. I’ve done a few videos about Gamma (check out the TLDR one) but negative gamma means dealers will assist the move through it, so if institutions are buying into a negative gamma level and price is moving towards it or through it, they will start buying as well to help price move higher. Same applies to negative gamma under spot price as price moves down through it. Positive gamma is the opposite, it’s a more stabilizing, resistant force. So if if we see positive gamma above price and buying is driving it higher into a positive gamma level, dealers will be selling against it due to their hedging requirements. If institutions still push us through it and exceed the “curve” so price breaks through, the next time we pullback to test that level (via selling) dealers will be buying.

@@FattyTrades Thanks for taking the time for the in depth answer. Watch every video and some a few times. Thanks for sharing all this great insight into the market.

As far as I know the Vanna charts on Tradytics don’t show the vanna with the same level of accuracy. One benefit of Tradytics SpotGEX is it builds up real time based on option positions, but options only at the bid/ask prices are being captured (relates to gamma only)x. Volland includes all options across all chains for a particular ticker & runs some complex calculations but doesnt update real time. So I’ve been using Volland to get the big picture beginning of the day & determine notional hedging requirements (which I need to do a video on) & then keep an eye on SpotGEX to keep an eye on changes throughout the day. However despite this, Vanna on Tradytics has never shown properly whenever I’ve checked. I’ll compare them tomorrow morning on SPX to see if the look the same. Volland has the most accurate depiction of the dealer data before open so if the Tradytics picture of vanna differs from this then we know that vanna isn’t being displayed properly. Remind me to message back to this comment tomorrow if you don’t hear from me.

@@FattyTrades Pokey poke

​@@jjhowey Hey thanks for the reminder! I ended up checking and it looks like Vanna was displayed differently. I'm going to check again tomorrow to be sure because I didn't get a chance to compare the Tradytics picture until 30m after open which means it might've started changing since it updates real time. I think this has to do with the fact that only options at bid and ask are being included and the rest are being left off. For instance, the big Vanna repellant at 3850 isn't showing which is critical right now. It also isn't showing significant Vanna at SPY 400 which is acting as repellant as well. VannaGEX flips the picture but I don't necessarily trust it because if Vanna on its own isn't accurate, then I imagine VannaGEX wouldn't be. The GEX picture definitely looks a lot more accurate, which surprised me. I'm not sure why the Vanna depictions would be so different. However, Tradytics follows the data driven approach instead of the traditional hedge fund approach, so using dealer positioning we can make certain assessments with all the greeks combined. However, it doesn't give the same picture and usually has the best correlation when looking purely at deltas. The dealer positioning dashboard this morning accurately reflected what happened. I checked the Vanna and Gamma on SPX and SPY via Volland which indicated accurately we would be pinned between 392 and 395 on SPY today. When I ran the dealer positioning correlations on SPY for the next 3 days, it also indicated we would be pretty flat, with 1% moves in either direction being possible. all that being said, I think there's value in both and I have been checking both (along with dark pools) every morning. I'll be sure to do an updated video on this stuff because new features have been added and my process has changed quite a bit. Plus my morning prep vids were some of my first and very poor quality, so it's worth redoing.

@@FattyTrades Is it the type of thing that its worth putting a ticket into Tradytics for to ask them to improve Vanna? I don't know if a lot of your audience can afford both subscriptions (yet) :)

@@jjhowey I've talked with Haider (Tradytics creator) and Jay (Volland creator) about it and it's incredibly complex to do what Jay is doing by consuming the entire options chain and determining if dealers are short or long. I don't fully understand it myself and i know he shared some of he secret sauce with Haider but I think a lot of the nuances are patented. It's certainly not an easy fix and I think why Haider favors the data driven approach because that's what he's really good at. For instance, services like SpotGamma remedy it by assuming dealers are always long calls and short puts which I guess works but is very inaccurate in times of high volatility. GammaEdge solves it by focusing primarily on Gamma and ignoring Vanna. Haider chose to select the Bid/Ask style (which still has its problems because Ask can be market buy or limit sell, bid can be market sell or limit buy) and ignores the stuff in the middle. However, for the most part it captures the big stuff. However, the dealer positioning dashboard in Tradytics will crunch all the data and tie it to past correlations which is very powerful as well. So rather than use the traditional approach, he looks at the current data from all options and compares them to the past 2 years or so (however long they have data for) and makes predictive assessments based on historical moves which is a very powerful and unique approach. This is ultimately why they decided to partner up, so they could both focus on doing what they do best. If you can't afford Volland, I wouldn't stress over it, it's nice to have the depictions but as mentioned using the dealer positioning dashboard and DP data in Tradytics alone is perfectly fine. And even then, MM data only accounts for 30% of the move, so while it provides an edge, things like chart reading using volume profile and reading where liquidity is at using smart money concepts by ICT (totally free, just takes some to learn) will allow you to identify where institutions will likely buy and sell. The dealer data just tells if you if dealers are with or against the institutions. I wouldn't say volland is the difference between me being profitable or not profitable, that really comes down to reading charts, paying attention to macro news (CPI/FOMC/PCE/etc), and executing well (not exiting too early, scaling out to capture more of a move, respecting stops, etc.). It's nice when things play out like they did Monday where the Sunday data predicted the move exactly, but that's not always the case, so therefore I would encourage you to master the tools you currently have available (especially the free ones like the chart). Then, down the road decide if you find benefits to having the insights tools like Volland has to offer. Even if the Vanna picture isn't calculated in as complex a manner on Tradytics, Tradytics still has some incredibly potent tools that you can use to the same effect. My personal favs are Dealer Market Diary, Dealer Positioning dashboard, TradyFlow, Market net Flow, and the new AI portfolios which is the only one I haven't covered on this channel. I'm going to make an effort to post the Volland insights every morning with the Tradytics insights on Twitter. While I prob won't succeed every morning, keep an eye out there because you'll be able to get the data and my take for free. Also, follow WizOfOps because he does a fantastic breakdown of VIX and SPX every morning before open using his Volland tools. Anyway, that's my long winded way of saying I wouldn't bother with a ticket, it's more complicated than it may seem 🙂

Yes i plan to cover them a lot more. I've dropped other tools for the dealer positioning data because Volland doesn't make classical assumptions and includes all the contracts.

So negative below spot would mean that if IV is rising (because price is falling or other factors) dealers would be buying so it would act as repellent. However, if crossed despite the initial dealer buying, the sign would flip and then more intense selling would occur as IV continued rising. This is because once the vanna curve is breached and we are close to or at the money, the dealer selling would really take over from the negative gamma and as we continued crossing the strike, dealer selling would continue from the vanna curve taking back over with the sign being flipped after the gamma curve fell off.

@@FattyTrades thank you for the explanation! appreciate what you do!

Thanks, happy to help!

I would put stopped my subscription with them for a bit because of some billing issues I ran into. This was back when it was still in beta so I do plan to revisit at some point in the future and will do so when the time comes.

Yes far better. Gammaedge is okay but there’s a couple importance nuances that them & SpotGamma don’t necessarily advertise. One, Vanna is a much more significant driver of macro moves then gamma. However, gamma is still great intraday, it only applies when the level is being approached and is strongest on that particular level. Large Vanna, due to the mechanics of volatility across the options chain, impacts movement even when we aren’t near the strike. Two, these other services make poor assumptions about dealer positioning. Rather than do complex calculations, they’ll assume dealers are always short puts and long calls which is inaccurate and can mix up of the level being net positive or negative. Or, they’ll only calculate options that occur at the bid/ask and completely ignore a large portion of position sizing with significant impact. Vol.land is the only dealer positioning service I know of that doesn’t do any of those things.

Hey let me know if this clears it up. If not, then let me know the follow up questions! kzfaq.info/get/bejne/fNGUqMRp37LUmGw.html But to answer the sign flipping question - if negative vanna above spot gets passed & flips to positive, it then will be under spot so it will cause dealer buying if IV drops & selling if IV rises (acting like a magent). That’s correct, gamma will never be a magnet even though it is often incorrectly attributed to one. I made the shorter video I just shared to help simplify it further as best as good. In this video I think I didn’t do the best job of that so apologies for any confusion. I think I’m gonna take this one down & expand upon vanna in a series of short ones starting with the new one I just shared.

@@FattyTrades thanks Kevin. I watched the new one and it's making a lot more sense with the emphasis on the Vanna curve structure and spot crossing the strike to flip the Vanna effect from negative to positive. +V < spot < -V are magnets. IV goes up as spot moves down towards +V increasing dealer deltas. So, they have to sell deltas. IV goes down as spot move up towards -V so, they decrease dealer delta, so dealers have to buy to increase delta. The opposite is true with spot between -V and +V... The Vanna effects kick in more if the strikes with Vanna are delta 20-40 away... I'm finding the tradytics Vanna do seem to be respected but could be a coincidence.

I think Tradytics should have the big ones right because they capture all flow at the bid/ask. So for a quick breakdown, let’s assume if price is rising, IV is dropping & if price is dropping, IV is rising. Not always the case but typically is the case. Regardless though of price: +V above/below spot causes dealer selling as IV rises and buying as IV drops (magnets price towards it) So think of positive vanna similar to negative gamma - it will amplify/exaggerate the current move, increasing volatility. The difference being it impacts distant strikes. -V above/below spot causes dealer buying as IV rises and dealer selling as IV drops (repels price away from it) If negative gamma gets crossed over, the sign flips. So it becomes positive. Let’s say that spot price was under negative vanna and we get past the vanna curve and the gamma curve helps us accelerate over it with IV dropping. Now it flips positive and as we re-enter the vanna curve, before it was causing selling as price approached now it causes buying as long as IV continues dropping, accelerating the move higher since it’s positive vanna. If IV started rising after we passed it, it would cause selling as we fell back towards it and flip back to negative if we crossed again. Hope that helps. I plan to make a follow up exposing this exact scenario.

Ugh, you’re right! Definitely saving that one for next time 😅

I’m going to do a whole video on this exact topic soon but it really depends on if they are Vanna repellents or magnets. So let’s say we have vanna repellents at 379 & 388 like we did this whole week, with a magnet at 384. Usually the options don’t restructure in a major way mid week so I would do a broken wing butterfly with wings at the repellents & body on the magnet. Or an iron condor with the short legs at the repellents. When we have multiple magents you can do butterflies on each and close them when price lands on them since butterflies have good risk/reward unlike condors. If vanna structure indicates a move higher (repellents below, magnets above) a simple debit spread with the short leg at the magnet would be great. Or a credit spread with the short leg at the repellent.

@@FattyTrades Incredibly informative answer so I thank you for that and for not including Pat Sajax on thumbnail 🙏🏻

Haha Pat didn’t make the cut!