Mar 10 (edited) • 💬 General discussion
Listen up
I asked 3 days ago about the JPM collar. No one answered, only to leave me guessing that ya'll are not paying attention to these things.
What have I been saying about delta hedging? Why it's important to understand it?
Inside TGE Max, I've been watching the 5565 SPX like a hawk. Why?
Because JPM had a $280M notional on a bullish position on SPX 💰
Making their position delta positive 🟢
But that's not the important part. The important question is, what does this mean for the dealer?
The dealers have to take the opposite position putting them at negative delta. JPM had a $280M short put and the dealers bought that put.
Forcing them to buy the equivalent amount of shares based on the Delta.
Let's say that the Delta was +.47 and $142 per con, making JPM 927k+ of positive delta exposure. Clearly dealers are negative.
To hedge this position they have to BUY the underlying security. You can see the image chart here: https://www.skool.com/tge-free-4382/how-option-dealers-are-buyingselling-the-stock
This is about $5.1B worth of SPX buying to hedge against their bearish position.
What happens from here? Idk.
We either squeeze, or we continue to selloff.
If we do selloff, then dealers are forced to buy more until we squeeze and all bears are screwed.
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