Good Morning!

Yesterday, Our SPY analysis was spot on! We hit heavy resistance at 660, churned beneath it all day, and had a quick spike down through 655 into 654. I did take a quick trade on the position based on the analysis for a quick 16% on the day and then I was out of pocket the rest of the day to do anymore trades.

Whale watching is our daily segment geared towards sharing some of the most significant options order flows from wall street whales. Seeing what they are buying can help us formulate our own trades or sometimes follow them into theirs if we get the entire thesis.

TSM had some interesting flow come in. Someone is preparing for a ~10% drop based on their positioning today. It will be interesting to see how this plays out. This position was built quick and mostly came in within a half hour of the initial buys. The “Sweep” orders also indicate urgency and that someone wanted a position built here sooner than later and they weren’t being secretive about it. Ultimately, I’m just monitoring this one for now.

If you are more into LEAPS (which are essentially longer term options) then these NVDA contracts that hit today for nearly $18 million in premium are looking great! Tons of flow on these contracts today and honestly they give you nearly 2 years for the thesis to play out.

This whale or whales has positioned significantly out of the money with the $250 strike but they’ve given themselves plenty of time for it to play out and by taking the way OTM strike price they could stand to make a ton of money if they are right with this one. As far as options go, this is one of the more calculated bets I’ve seen and could be a good hold for those who don’t like the short dated options.

This SPY update is coming to you at about 6 AM EST. I’ve got a flight this morning and needed to type it up before I go to the airport so just wanted to let you know things can change as we move closer to market open but here is how I see things as they stant.

On the daily (3/26 exp): SPY is down premarket. As I type we are down about 0.70%. This is positioning us up to open just below a pocket of negative gamma at $653. Right now, that pocket of negative gamma is our biggest positioning on the daily board. There is positive gamma at $655 and above but it’s not near as heavy as we were dealing with yesterday. I do expect more volume to come in and change how these gamma pockets look before market open, but right now we could be dealing with a nice wick down at open as institutions sell the open into negative gamma.

Rest of the chart: Negative Gamma still rules the chart right now. This essentially just means volatility and elevated directional moves. The largest pocket of negative gamma right now is hanging out at the $640 strike for next week. Keep an eye on that range as gamma building up there could be a signal but if the position starts to unwind that could also be a more bullish signal.

This one will ultimately be determined by how the Gamma stacks up by market open. I continue to think the move is buying puts into strength here. It’s hard for me to give you exact numbers today since I am writing so early and I know gamma will look a little more clear as we get closer to market open. With the positive gamma still overhead, I still find it hard to think we move upward much. I’m looking at puts again today to be my best chance at generating profits.