The OPEX Effect

Excess Returns
  • 4.5 (2)
  • INVESTING
  • UPDATED MONTHLY

The OPEX Effect is a joint podcast from Excess Returns and SpotGamma where we take a deep dive into the world of options and the flows they generate in markets. Join Brent Kochuba and Jack Forehand every month on Options Expiration week as they look at the major developments in the options world and how they impact all of our portfolios.

  1. OCT 19

    Fragile Rally. Big Vol Spike. Credit Risks Rising | What the Options Market Says About What's Next

    In this episode, Brent Kochuba of SpotGamma joins Jack Forehand to break down the October options expiration and the surge in volatility that hit markets. They discuss record-breaking options volumes, the impact of zero-DTE trading, Trump’s market-moving tweet, and why the options market is increasingly driving short-term price action. Brent explains how positioning, gamma dynamics, and liquidity flows combine to create instability — and what that might mean for volatility into year-end. Topics covered:• Record 110 million options contracts traded and what it means for market structure• Why volatility spiked even though the S&P 500 barely fell• The role of dealer positioning and negative gamma in amplifying market swings• How the AI trade and single-stock call buying distorted implied volatility• The growing dominance of zero-DTE options and their destabilizing effects• What OPEX and VIX expirations tell us about volatility mean reversion• ETF leverage, financialization, and systemic risk• The relationship between correlation, dispersion trades, and crowding in AI names• Why volatility events now resemble “spasms” instead of slow corrections• How these options dynamics could influence the year-end “Santa Claus rally” Timestamps:00:00 Record options volume and volatility spike04:00 The AI call-buying frenzy and how it unwound10:00 Understanding dealer gamma and hedging flows12:00 OPEX, VIX expiration, and mean reversion in vol16:00 Event calendar and upcoming catalysts18:00 October OPEX setup and neutral call/put balance21:00 Seasonal trends and the “Santa Claus rally”27:00 Revisiting September’s predictions and what played out33:00 Market concentration and AI narrative40:00 Dispersion trades, correlation, and crowding44:00 Zero-DTE dynamics and their systemic impact50:00 Volatility spikes, leverage, and what comes next

    1h 15m

  2. SEP 14

    Vol Is Crushed. Risk Isn’t | What the Largest OPEX In History Tells Us About What Comes Next

    In this month’s OPEX Effect, Brent and Jack break down the September OPEX, which may be the largest ever. With volatility deeply suppressed, a record call skew, and the Fed meeting coinciding with VIX expiration, markets are set up for potential fireworks. The conversation explores how derivatives flows shape equities, why this expiration could be a turning point, and what investors should watch around key levels like 6,500. Topics Covered Record zero DTE volumes and their market impact Why September OPEX may be the largest expiration ever The “vol pop zombie hunter” theme and what it signals How option dealer hedging drives equity flows The correlation between gamma positioning and volatility Macro dynamics: rate cuts, liquidity, and potential bubble parallels Why call skew is extreme but call prices remain low How suppressed implied vol sets up risk of a volatility spike The VIX futures curve, ETF flows, and market dislocations Key levels to watch: 6,500 and beyond for downside risk Timestamps 00:00 – Zero DTE dominance and setup into September OPEX 02:00 – “Vol Pop Zombie Hunter” theme explained 06:00 – How options flows translate into equity moves 11:00 – Options expiration cycles and turning points 16:00 – Largest expirations and potential market reversals 20:00 – Extreme call skew and positioning risks 28:00 – Sector positioning and the lack of call demand 33:00 – Correlation lows and implications for market breadth 37:00 – Realized and implied volatility at historic lows 43:00 – VIX futures curve, ETFs, and contango dynamics 50:00 – Risks below 6,500 and the role of JP Morgan’s collar 53:00 – The destabilizing effect of disappearing zero DTE flows

    57 min

  3. AUG 9

    Low Volatility Is Lying to You | What the Options Market Says About What Comes Next

    In this episode of The OPEX Effect, Jack and Brent dive deep into the current market dynamics, exploring what they call the "Honey Badger" and "Zombie" market phenomena. With options volumes hitting record highs and realized volatility at basement levels, they analyze whether we're heading into a 2017-style low-volatility grind or if a volatility spike is imminent. The discussion covers everything from the latest options positioning data to the impact of zero-DTE trading on market behavior, providing valuable insights for both short-term traders and long-term investors. Market Rally Analysis - Comparing the current 4-month rally (25%) to post-COVID gains and why it feels more orderly than expectedThe "Honey Badger" Market - How the market has been buying every dip regardless of negative headlines like tariffs and policy uncertaintyOptions Volume Records - Breaking down the explosive growth in options trading and its impact on underlying stock flowsRealized Volatility at Extremes - Why hitting 6% realized vol signals potential for major volatility expansion aheadThe "Zombie" Market Theory - Drawing parallels to 2017's low-volatility environment and what it means for positioningOptions Positioning Data - Current expiration analysis showing surprisingly average positioning despite market highsTech Calls Opportunity - Why tech sector calls are at their cheapest relative levels in nearly a yearMarket Maker Hedging Flows - How dealer gamma positioning creates "strait jacket" effects on market movementJackson Hole & Rate Cut Expectations - Upcoming catalysts and why the market is pricing in 91% chance of rate cutsNew Tool Launch - Introduction of Flow Patrol, a daily PDF report tracking proprietary buy-side positioning data 00:00 - Introduction and market rally discussion01:18 - Honey Badger market concept explanation05:05 - Options volume impact on equity markets10:05 - Hedging flows and market dynamics12:00 - Historical options expiration patterns16:00 - Positive gamma and "Chinese finger trap" markets18:00 - Current expiration positioning analysis24:00 - July predictions review and honey badger emergence33:00 - The zombie market theory and realized volatility extremes43:00 - Friday market action and volatility pricing analysis47:00 - The "spasm" effect and correlation dynamics52:00 - Forward-looking events and zombie market continuation57:00 - Investment recommendations: puts and tech calls59:00 - Bubble detection through options pricing1:04:00 - Flow Patrol tool announcement and wrap-up

    1h 5m

  4. JUL 14

    All-Time Highs. Record Complacency | What the Options Market Tells Us About What Comes Next

    Markets are sitting at all-time highs, but under the surface, the options market is flashing signs of extreme positioning. In this episode, Brent Kochuba of SpotGamma returns to break down the latest options expiration cycle and what it could mean for stocks going forward. We discuss why record call buying, minimal hedging, and low implied volatility are creating a potentially fragile setup — and why upcoming events like CPI, VIX expiration, and tariffs could act as catalysts. Whether you're a long-term investor or a short-term trader, this conversation offers a deeper look at how positioning, dealer flows, and volatility pricing impact market behavior. Topics covered include: Why extreme call skew signals crowding The importance of gamma, vanna, and charm How options flows can drive short-term market moves The "window of weakness" around OPEX and VIX expiration The role of tariffs, CPI, and macro catalysts in this setup Tactical implications for investors and traders

    1 hr

  5. JUN 15

    A Rally Built on Fragile Ground | What the Options Market Tells Us About What Comes Next

    In the latest episode of the OPEX Effect, Jack Forehand and Brent Kochuba dive deep into the dynamics shaping the current market regime, with a particular focus on the upcoming June OPEX, dealer positioning, volatility trends, and the surprising resilience of the S&P 500 amid geopolitical stress. They break down how options flows continue to dominate equity price action, why the market remains pinned despite negative news, and what might finally break the calm. With some of the largest options expirations in history on deck, this is a must-watch for anyone following volatility, hedging flows, and macro signals. 💡 Topics Covered: Why volatility often contracts before OPEX and expands after The significance of the June 2025 OPEX as potentially the largest ever Dealer gamma, hedging flows, and what they signal about near-term volatility Why implied vol is so low despite major geopolitical risk (e.g. Israel-Iran conflict) The JP Morgan collar trade and its influence on the 5,900 level in the S&P How zero-DTE options impact market stability and risk signaling A potential regime shift: AI stocks, “taco trades,” and declining liquidity What vol metrics like VIX, VVIX, and correlation are really saying The hidden risk of overconfidence when markets ignore bad news Breakdown of sector-specific volatility expectations (tech, energy, gold, Bitcoin)

    59 min

  6. MAY 10

    The Rally No One Trusts | What the Options Market Tells Us About What Comes Next

    In this episode of Excess Returns, Jack Forehand and Brent Kochuba from SpotGamma break down the forces at play beneath the surface of the market as we head into the May 2025 options expiration (OPEX). While the S&P 500 has rallied hard, a deeper look at positioning, liquidity, volatility, and sentiment reveals a market on a potentially fragile footing. From the continued explosion of zero DTE options to concerning signs from liquidity metrics, this discussion explores how short-term positioning could dictate major moves—and why the post-OPEX landscape may not be as stable as it appears. Plus, yes… we finally explain the "Saul Goodman" reference. 🔑 Topics Covered: Why May’s OPEX setup is lopsided with call exposure—and why that’s dangerous The eerie lack of downside hedging despite a big market rally How zero DTE options and mean reversion flows are masking real volatility The dangerous illusion of low realized vol vs. wide intraday ranges Why poor liquidity is a potential precursor for the next volatility event Analysis of SPX vs. SPY positioning—and which one signals more risk The “Saul Goodman” signal: What it means and why it might be a contrarian tell What the data says about a potential flip post-OPEX June expiration on deck: Could it be the next volatility catalyst?

    1h 4m

  7. APR 19

    An Unprecedented Lack of Liquidity: What the Options Market Tells Us About What Comes Next

    In this episode of The OPEX Effect, Jack and Brent dive deep into the market turmoil following "Liberation Day" and the implementation of new tariffs. With volatility spiking to levels not seen since the 2020 COVID crash, the hosts analyze how options markets are reacting, why liquidity has evaporated, and what investors should expect in this new higher-volatility regime. The conversation covers everything from VIX behavior to options positioning, and provides critical insights for navigating these turbulent markets. Key Topics Covered: The recent market volatility spike and why this represents a fundamental "regime change" How options market makers are reacting to the tariff announcements and subsequent 90-day pause Why liquidity has disappeared from markets and its impact on price movements The significance of this month's options expiration and VIX expiration Why zero-DTE options are NOT the cause of recent volatilityTechnical support and resistance levels based on options positioning Gold's recent surge and signs it may be ready for consolidation The impact of increased correlation across asset classesExpectations for upcoming earnings season and its importance in this environment

    1 hr

  8. MAR 15

    One of the Fastest Corrections in History: What the Options Market Tells Us About What Comes Next

    In the latest episode of the OPEX Effect, Jack Forehand and Brent Kochuba take a look behind the scenes of the big market selloff and the options flows driving it. They break down the massive options expiration coming up (the second-largest ever) and its potential impact on market movements.Key topics covered:Understanding the current high-volatility environment and why options volumes are driving increased market swingsAnalysis of the JPMorgan collar trade at the crucial 5565 level and its market implicationsDeep dive into the mysterious "Captain Condor" trader and their impact on market dynamicsDiscussion of multiple major events ahead: VIX expiration, FOMC meeting, quarterly OPEX, and potential tariff deadlineExamination of fixed-strike volatility and why traditional VIX readings might be misleading in the current environment

    1h 6m
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About

The OPEX Effect is a joint podcast from Excess Returns and SpotGamma where we take a deep dive into the world of options and the flows they generate in markets. Join Brent Kochuba and Jack Forehand every month on Options Expiration week as they look at the major developments in the options world and how they impact all of our portfolios.

Information

  • Creator
    Excess Returns
  • Years Active
    2023 - 2025
  • Episodes
    25
  • Rating
    Clean
  • Copyright
    © Excess Returns
  • Show Website
    The OPEX Effect

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