🔥

GEX+ Insights: Volatility Buyers and Long Strangle Strategies

🔥

The observed long strangle structure indicates a strategic move by volatility buyers to position for potential market volatility:

Breakeven (with premium): 86k or 113k

⚖️

Delta Dynamics:

The 90k put option has a strike price closer to the current underlying price of 97,455, thus having a higher absolute delta compared to the 110k call option.

This delta imbalance makes the put option more heavily hedged, resulting in a net short inventory at the outset.

💡

Implied Volatility and Risk Premium:

Traders buy options (calls and puts) expecting a spike in volatility

📈

.

Traders sell options to collect the risk premium, maintaining a +Gamma/-Vega position.

Traders typically buy options (calls and puts) in anticipation of a spike in volatility. Conversely, traders sell options to capture risk premiums, resulting in positive Gamma and negative Vega in their net position.

Initial hedges focus on Delta-weighted exposure to puts, which have a dominant position on stocks due to their proximity to the underlying price.

💰

🔑

Major opportunities:

Liquidation clusters indicate high leverage areas:

Can trigger a chain reaction, amplifying price moves.

After a large number of liquidations, the market stabilizes and reverts to the mean.

Levels to watch:

Support: 96,000: Key volume area, short-term support.

94,000-92,000: Major liquidation clusters = potential mean reversion pivot.

Mean reversion targets: 98,000-100,000: High liquidity area, possible rebound zone.

📊

Things to watch:

Price stabilization above 96,000 → indicates easing selling pressure.

🎯

Potential strategies:

Buy zone: 92,000-94,000 (liquidation and volume support).

Target: Rally to 98,000-100,000.

💡

Final tip:

Track real-time liquidation and order flow data. Turning points may occur when liquidations ease and hedging pressures abate.