1/6
Now up to SEVEN big reversals in a little more 2 days!
INTRA-day volatility increasing, especially when the market is trading sideways, and not trending, like below.
Now up to SEVEN big reversals in a little more 2 days!
INTRA-day volatility increasing, especially when the market is trading sideways, and not trending, like below.
2/6
The cause of increased INTRA-day is up for debate.
Many look to ODTE options that expire EVERYDAY, now that the exchanges listed Tuesday/Thursday expirations last fall.
Is this the leading reason for this increase in INTRA-day volatility. I say yes.
The cause of increased INTRA-day is up for debate.
Many look to ODTE options that expire EVERYDAY, now that the exchanges listed Tuesday/Thursday expirations last fall.
Is this the leading reason for this increase in INTRA-day volatility. I say yes.
3/6
Volatility is a measure of risk.
THIS IS IMPORTANT ... risk can never be eliminated, only transferred. Risk is zero-sum.
So, if 0DTE is increasing INTRA-day moves, it has to decreasing volatility somewhere else.
That is INTER-day (close-close) volatility, the red line.
Volatility is a measure of risk.
THIS IS IMPORTANT ... risk can never be eliminated, only transferred. Risk is zero-sum.
So, if 0DTE is increasing INTRA-day moves, it has to decreasing volatility somewhere else.
That is INTER-day (close-close) volatility, the red line.
4/6
So, is 0DTE outright gambling? Yes, especially with single-leg 0DTE trades exploding in popularity.
It's fanduel parlay betting on the next play for the stock market.
So, is 0DTE outright gambling? Yes, especially with single-leg 0DTE trades exploding in popularity.
It's fanduel parlay betting on the next play for the stock market.
5/6
Is this bad for investors that hold for more than one day?
No, they benefit as it decreases INTER-day (close-to-close) volatility.
This is good for investors!
Is this bad for investors that hold for more than one day?
No, they benefit as it decreases INTER-day (close-to-close) volatility.
This is good for investors!
6/6
~90% of 0DTE options trades are losers.
So, celebrate the degens that are wrecking their financial life to make your financial life better!
Or should we pity them like welfare recipients blowing their checks of scratch off lottery tickets?
@profplum99 @spotgamma
~90% of 0DTE options trades are losers.
So, celebrate the degens that are wrecking their financial life to make your financial life better!
Or should we pity them like welfare recipients blowing their checks of scratch off lottery tickets?
@profplum99 @spotgamma
THIS IS IMPORTANT ... risk can never be eliminated, only transferred. Risk is zero-sum.
---
If everyone buys earthquake insurance, it does not decrease the probability of an earthquake.
But it does transfer who bears the financial burden should an earthquake happen.
---
If everyone buys earthquake insurance, it does not decrease the probability of an earthquake.
But it does transfer who bears the financial burden should an earthquake happen.
Loading suggestions...