If you want to navigate market volatility, you should
track the wake of the large traders who monetize it.
It is not uncommon for investment bank trading desks to go entire quarters without losing money. There are many ways that the large traders legally arbitrage the financial markets, enabling them to book vast profits on a very consistent basis. One of the ways that the big money traders earn arbitrage profits is via the options markets.
Each morning, we compile a myriad of options data and run thousands of iterative Black-Scholes calculations to arrive at the "OPEX Price Magnets" for the most important commodities and ETFs. Our daily reports currently include gold, energy, agriculture and equities. Here is a recent chart of gold futures, which shows how the futures price has tended to mean-revert to the Price Magnet, very often prior to option expiration day. Download a free sample report to learn more!
If you are active in the markets, you might read articles about market volatilty and negative gamma. Then, you scratch your head and wonder what it all means for your trades & investments. Good news. We have distilled the key market data, so you don't have to buy a Bloomberg Terminal or become an expert in options, options greeks or market volatility.
Here is what subscribers are saying:
The vast majority of call and put contracts expire worthless. Who do you suppose is the usual winner in these trades? Is it the retail investor? Or might it be the large financial institutions who hire PhDs to run super-computers, and who have superior market access with vast liquidity and resources?
OPEX Price Magnets: A Precise Tool
Similar to sentiment indicators, the Price Magnets can be used together with technical and fundamental analysis, COT reports and other trading indicators. The Price Magnets are the price level where the options delta and gamma are neutral. This is where the big traders are expected to earn the highest profits. The Price Magnet is not a "forecast," a "prediction," or "price target." Nevertheless, looking at the historical data, we can see an obvious mean-reversion between price and the Price Magnet.
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We have written about OPEX Price Magnets in several articles which demonstrate its effectiveness as a trading tool The picture below shows one example of how we have used the Price Magnet in a trade in SPY. In the midst of the recent market volatility, we have also successfully shorted QQQ and went long QQQ into option expiration.
Click the red button to download a sample report!
Leveling The Playing Field
The OPEX Price Magnet is the price where option delta and gamma are neutral. This is the price level at which the big traders are expected to optimize profits on or before option expiration day.