Goldman: market makers are unable to cover the short single stock gamma generated by retail investors’ call buying and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

And this is the outcome

— zerohedge (@zerohedge) June 17, 2021

ClutchCityAg said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors’ call buying and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

And this is the outcome

— zerohedge (@zerohedge) June 17, 2021

Can someone translate?

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Agvet12 said:

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Decay said:

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ClutchCityAg said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors’ call buying and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

And this is the outcome

— zerohedge (@zerohedge) June 17, 2021

Can someone translate?

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Stonk go up?

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Selling off longs to cover amc shorts to prevent a gamma squeeze

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McInnis 03 said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors' call buying

meme stocks getting pounded with call buys and the market makers can't effectively cover the short calls they have (the ones retail bought)

and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

to find cash they have gone to near expiry SPX options to cover

And this is the outcome

Because of their transactions, the delta hedging on SPY is now getting outta whack and this is the system effect

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ClutchCityAg said:

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Brilliant! Thats what I was thinking but wanted confirmation

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Scimitar said:

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As long as you reflect that in your cost basis.

I typically only sell options. Covered calls to reduce my cost basis or short puts if I want to be assigned and own the stock cheaper than where it was trading.

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Prognightmare said:

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Scimitar said:

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I would say buy-side is better for a job because you are investing rather than advising. That said, the underlying work is largely the same either way and I truly have a servant's heart and like helping folks.

And, like anywhere else, no shortage of backstabbers

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I was in the industry a longtime ago and these two statements tell me that you and I are similar. Backstabbers are everyone at any firm from my experience and most, if not all, are alphas.

I'm grateful for what I learned by the experience but I'd never go back. I now just actively control the accounts for people very close to me and I do it for free. I have friends I make recs to but they only buy me a beer or shot and that's cool. Except for my friend in Houston, he's required to bring me shawarmas and humus from Phoenicia Deli in HTown when he comes to visit or I don't give him any advice.

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McInnis 03 said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors' call buying

meme stocks getting pounded with call buys and the market makers can't effectively cover the short calls they have (the ones retail bought)

and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

to find cash they have gone to near expiry SPX options to cover

And this is the outcome

Because of their transactions, the delta hedging on SPY is now getting outta whack and this is the system effect

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tlepoC said:

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Are quadruple-tops worse than triple-tops? (wait for the confirmation....wait for the confirmation)

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McInnis 03 said:

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McInnis 03 said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors' call buying

meme stocks getting pounded with call buys and the market makers can't effectively cover the short calls they have (the ones retail bought)

and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

to find cash they have gone to near expiry SPX options to cover

And this is the outcome

Because of their transactions, the delta hedging on SPY is now getting outta whack and this is the system effect

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Also not sure this is the reason though

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PearlJammin said:

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McInnis 03 said:

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McInnis 03 said:

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Goldman: market makers are unable to cover the short single stock gamma generated by retail investors' call buying

meme stocks getting pounded with call buys and the market makers can't effectively cover the short calls they have (the ones retail bought)

and are trading long positions in strips of ultra-short-dated SPX index options to offset this gamma.

to find cash they have gone to near expiry SPX options to cover

And this is the outcome

Because of their transactions, the delta hedging on SPY is now getting outta whack and this is the system effect

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Also not sure this is the reason though

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So in other words, don't sell, or perhaps buy, meme stocks as the hedge funds generate cash to cover while they try to scare the retail folks into selling their shares?

That $2MM call on AMC someone posted comes to mind.

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Entered July 16 $NVDA $645 Puts at $2.54

— 2021 Opportunity Stocks Knock (@oldarmy1) June 17, 2021

Prognightmare said:

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FJ43 said:

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So....are we gonna get one more little flush or slow grind down before EOD?

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It depends on which hat you're wearing right now.

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