EXPLOSIVE GROWTH IN ZERO-DAY OPTIONS MAKE IT DIFFICULT FOR STOCK MARKET BEARS
By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Zero-Day Options Explosive Growth
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows that on Thursday and Friday, the market closed well above the low of the day. The primary reason was aggressive buying of zero-day call options.
- Zero-day options expire the same day.
- Zero-day options are seeing explosive growth. By some estimates, they are reaching a notional value of $1 trillion.
- In The Arora Report analysis, if it was not for aggressive buying of zero-day call options, the stock market would have fallen at least to the algo selling line shown in red on the chart.
February 27, 2023