Episode Double Nickels (55) of Bid Out dives into the deep end of US options market structure with two experts, Dave Kovtun from Jane Street and Paul Jiganti of IMC Markets.  The goal of this podcast was to educate equity traders and portfolio managers about the information content of options activity and related impact on the underlying securities.  Listeners will learn about recent market moving options activity in the S&P and some less liquid US stocks, and what it means to have single stocks expire during the week, in addition to once a month on the third Friday.  Paul and Dave tamp down any chatter that 0DTE trading might lead to a so-called Volmageddon 2 event, as potential land mines from option market maker rebalancing are well known to the Street.  Dave does an excellent job explaining how market makers hedge options risk and how the lack of homogeneity in hedging strategies leads to more liquidity in the market.  Paul and Dave finish with some suggestions for improvements to options market structure, a space that has not garnered a huge amount of regulatory attention in recent years.

Chapter Headings: 

8:42 - Some Recent Market Moving Options Activity

12:32 - 0DTE – Tamping Down Talk of Volmageddon 2

22:00 - Single Stock Options – New Expiries During the Week

27:14 - How do Market Makers Hedge?

40:45 - Options Market Structure – What Needs to Change?

Disclaimer:

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by TD Securities, may not be current, and TD Securities has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. The views and opinions expressed in this podcast are not necessarily those of TD Securities and may differ from the views and opinions of other departments or divisions of TD Securities and its affiliates. TD Securities is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities or any other product and should not be relied upon to evaluate any potential transaction. Neither TD Securities nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

For relevant disclosures, visit: tdsecurities.com/ca/en/legal#PodcastDisclosure. To learn more about TD Securities, visit us at tdsecurities.com or follow us on LinkedIn @tdsecurities.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.