Here comes Elmer!
"The name's Francis Sawyer, but everybody calls me Psycho. Any of you guys call me Francis, and I'll kill you. I don't like no one touching my stuff. So just keep your meat hooks off. If I catch any of you guys in my stuff, I'll kill you. And I don't like nobody touching me. Any of you bozos touch me, and I'll kill you."
--Frances, I mean "Psycho" Sawyer, Stripes
A quick little blurb before we start the Minxtown shuffle. A Minyan pinged me and asked if that monster S&P put buyer could possibly be setting up gamma (rather than making a directional bet). The answer is a definitive YES. We've seen volatility (options) to buy all over the place today--a couple thousand BKX straddles, oil service premium, QQQ paper and more.
While the volatility indices (VXO, VXN, QQV) are up marginally (and were up yesterday), the flow is a bit more pronounced. Further, the stochastics for these indicators have all triggered buy signals. They're not necessarily timing mechanisms (see the broader averages the other way) but it's worth a mention nonetheless.
What is gamma? Professor Succo--who I consider to be the best option trader on Wall Street--has written excellent tutorials that lend themselves to our educational mission. If you haven't seen them, print 'em out and take the time to give 'em a good read. As you know, these are uber-risky vehicles and they're surely not for everyone but that doesn't mean we can't further our knowledge base.
That is, after all, what Minyanville is here for.
Good luck with Elmer.
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