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IPFS News Link • Stock Market

"It Just Keeps Getting Crazier" - Options Speculation Reaches Record High

• https://www.zerohedge.com, Tyler Durden

However, there are some notable anomalies in the VIX term structure that could become problematic in the next few days. As contracts expire, so the very steep term structure (fueling lots of short-vol-tilted carry trades) will flatten...

"This January VIX settlement is looking similar to January 2018 in that the new front month VIX spread between February and March is going to dramatically shrink the level of contango," said Dave Roberts, independent trader of volatility and volatility products, using the trader term for an upward curve.

"Combining this mechanical condition with potential risk-off factors of Sanders winning Iowa and poor earnings reports from the tech heavyweights has the ability to turn a regular pullback in something more meaningful."

And as Nomura's Charlie McElligott notes, in risk-asset bellwether US Equities, the current 96th %ile aggregate Dealer "Long $Gamma" position (~$31B between 3290 / 3300 / 3310 alone!) continues to act as a "gravitational force" for the S&P.


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