WE'RE ALL OPTION TRADERS NOW

The 'tourist examines BUY-WRITE ETFs' flows, and explains why option trading matters to everyone now

This post will combine two themes that I have written about in the past. With the surging popularity of “BUY-WRITE” ETFS, their flows are increasingly jerking around markets. We will review the sequence of their option rolling and how this can cause sizeable imbalances in the market. We will also examine how dealers’ gamma positioning changes the market…