The Gamma Bomb, but the other way!

[fstp, logo, header] May 31, 2024 [ag views, logo, header] The Gamma Bomb, but the other way!  [Mark Sebastian](mailto:/mark@optionpit.com) has been talking about how the liquidity could break in SPX given the right circumstances. Well we, he and I, thought that would happen on the downside for SPX when the option volumes overwhelmed the futures volume. That happened into the close as a mildly ugly day turned into a casual rally and then some shorts got trapped. Look at the chart below and the parabolic run! [ded] Now look at SPX options below. Massive upside volume as traders raced to hedge the calls they sold. The SPX May31 5250 calls went from .05 to $30.00 for a ginormous return. [ded] [ded] If you doubted the Gbomb will happen, you don’t have to look past today to see how easy it is for a meltdown to occur if stocks actually sold off. - AG  [logo, pit profits] Want to find YOUR winning fit? Give our Customer Care Team a call at [1-888-872-3301](tel:/1-888-872-3301) Monday-Friday from 9 a.m. - 5 p.m. EST. Or email them anytime at [support@optionpit.com](mailto:/support@optionpit.com)  [logo, fvix, header,] Plays we can make off the verdict On Thursday afternoon, after the market closed Donald J Trump was found guilty on all 34 charges in the case brought by the state of New York. While he is unlikely going to jail…he will get bail on appeal I would imagine,  frankly, long term, this verdict has zero effect on the stock market.  Yes, opening on Friday, we COULD see the market sell off some.  The prosecution of a former president, currently running for his job back, is going to cause some political turbulence.  But overall, it will have little to no effect on the market long term.  Take a look…in the last 40 years…it does not matter who is in office...stocks go up. That said…near term there could be some small fireworks…I do not think the VIX will move too much (in fact I have a bet with Andrew on how much it will move, I took the under).  Truthfully I do not think this has any outcome on the election and thus the market. However, there will be an effect on the stock market ... .notably…one stock….DJT…truth social. DJT is worth about 9 billion dollars, and basically all of that is tied to the brand that is Trump….let's talk about this stock in particular. I am going to skip the financial metrics…because they are abysmal…this company is literally banking on Trump winning the white house. Going into the verdict here is what the straddle for Friday May 31st looked like: [ded] The 52 straddle was pricing in about 3 bucks….the stock after hours is down about 3.18. I think they were expecting the verdict NEXT week…because that straddle was far more expensive: [ded] Leading into the verice the market was looking for like 8 bucks a week from Friday. Either way…after hours DJT is down about 3 dollars….less than both straddles were really pricing in. So what do you do with this info? I tell people repeatedly if you want to make money trading….leave politics at the door. I am looking to make money….not political statements. My take…people are going to want to hear what the man has to say ... .they are going to want to follow what Mr. Trump is saying. The selling is a knee jerk reaction with any luck they will crush the stock on Friday…that will probably be a trading opportunity from the long side ... .not I said trading and not investing.  I would never buy this stock for my children based on the current conditions…but will I go long for a couple of weeks…. Heck Yeah. I hope they crush this thing so I can play off algo’s over reaction. I'll be looking at calls in Delta Strike and strangles in Trading Desk ….you should join one of these because there is going to be A LOT of money to make off this verdict. - Mark --------------------------------------------------------------- Want to get Mark's Trader's Edge updates directly to your inbox?[Click this link to sign up!](  [fpip] The Verdict Is Out Hi Shoppers, The verdict is out. Former President Donald J. Trump was convicted on all 34 counts of “Falsifying Business Records in the First Degree.”  “ … falsifying New York business records in order to conceal damaging information and unlawful activity from American voters before and after the 2016 election.” Three separate payments:  -  American Media Inc. (“AMI”), paid $30,000 to a former Trump Tower doorman, who claimed to have a story about a child TRUMP had out of wedlock.  - AMI paid $150,000 to a woman who alleged she had a sexual relationship with TRUMP. - 12 days before the presidential general election – the Special Counsel wired $130,000 to an attorney for an adult film actress.  All quotes and above information taken from the Manhattan DA website:  [( A total of $310,000 to influence the 2016 election. According to[ opensecrets.org]( here is a chart of the amount of money spent on presidential campaigns with the description quoted: Here are the amounts spent on all federal elections, by cycle. These figures include all money spent by presidential candidates, Senate and House candidates, political parties and independent interest groups trying to influence federal elections:  [ded]( I guess it isn’t the amount of money, it is the falsification of business records. [Let’s take a look at the Trump Media and Technology Group (Ticker: DJT) chart and let’s trade!]( - Licia --------------------------------------------------------------- Join Licia's trading community and start receiving her Profits In Pumps Newsletter. [Click this link to sign up!](   Don't miss when our traders go live! Get an alert everytime we open the live rooms to all of our readers for free by selecting the calendar you use below. Add Option Pit Live Events to Your Calendar [Apple]( [Google]( [Outlook]( [Outlook.com]( [Office 365]( [Yahoo](   [glossary, logo] There are plenty of terms in the trading world that need explaining. The Option Pit Glossary is here to help. Today's phrase is:  Contango - When the back-month futures are higher than the spot and near-month futures. [Often used when referencing volatility assets.]( [ftsp] All the Right Options. The Option Pit Team brings more than 150 years of experience to you every day. 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