How Gamma Exposure Looks Ahead of CPI Tomorrow

Added: 2026-05-12

[00:00:00]The stock market grinded higher during today's trading session with the S&P closing above 7,400 at 741287 up.19% new all-time highs. Gamma exposure continues growing at higher strikes.

[00:00:14]We're now seeing the 7500 strike growing over the last several trading sessions.

[00:00:19]Even today, we saw nearly 50,000 contracts traded. It was the the largest volume spike when filtering the contracts that expire this week. So market participants believe or at least are betting for a potential blowoff top this week heading into the May 15th opex. A move into 7500 or even 7600 would represent blowing through big near-term resistance levels. And there's at least a few traders out there that believe that could be a potential possibility this week. Shifting out to our daily candlestick chart and changing our gamma exposure view to net gamma exposure. This helps us see where positive gam exposure is outweighing negative gam exposure and by how much.

[00:01:02]And just like we mentioned in yesterday's video, the majority is concentrated between the 7,400 and the 7500 strike. This is our upper dealer cluster zone. And the higher we get into this range, the more likely selling pressure is increasing from dealers as well as market participants who are looking to lock in profits. Obviously, the move over the last five weeks has been very impressive and so it appears a consolidation and potential pullback here in the next couple of weeks is likely. Uh we think that's going to happen after the May opex which is coming up this Friday. Thanks Anthony.

[00:01:37]With the inflation data this week, uh OPEX and monthly VIX expiration coming up next week, a week from this Wednesday, I thought we should take a look at the VIX and volatility to see what it looks like. And let's start with VIX, the index that looks at the forward expectations of volatility for the VIX itself. And actually, Vivix bottomed on the 28th quite some time ago and it's been consolidating mostly sideways ever since. But it it definitely gives the appearance that volatility may be bottoming here. Now, I wouldn't be surprised to see Vivix vacasillate between the uh the low to mid9s and the the chart setup does indicate that we might see Vivix move up to 105. Now, if we look at the VIX itself, I'm I'm watching this weekly whole moving average. This yellow line right here, it's been descending at a pretty rapid rate. And to me, it looks like it's likely to cross under the VIX potentially later this week and maybe start to turn up as we end the week or enter the beginning of next week. Not a lot of negative GEX or volume for that matter uh below the 17 area. You know, we have the VIX also making a bottom several days ago, but with inflation data being reported tomorrow and Wednesday, we just don't know how the market's going to react. Uh riskreward seems to be tilted in favor of volatility bulls at these lower levels.

[00:02:59]Uh even if it's not a large spike, you know, we've got the market looking bullish, that may not uh give the VIX a lot of room to the upside, but at the same time, uh the VIX is not declining anymore. So, we'll just keep an eye on this setup. The obvious implications would be a pullback for the market if we could see the VIX make this spike higher. Thanks, Sean. Next, I want to take a look at our performance screener to see what was moving the most today.

[00:03:23]I've got this filtered for market cap over 100 billion, filtering for the largest upside in those names. And at the top of the list, we've got Corning.

[00:03:32]Corning has just recently announced a partnership with Nvidia becoming more and more an AI related play. If we just take a look at the chart of corning, you know, this has been a big mover as of late and really just over the last four or five trading sessions, breaking out above the 180 strike. If we come out here to the larger gamma exposure picture, you know, we've got big gamma exposure around this 200 strike. And we also saw volume increasing quite substantially today at higher strikes as well between 200 and 250. And so even though the move in corning has been very impressive over the last couple of weeks, especially off of this 50-day EMA right around 150, we still think there could be further upside to go as high as the 250 strike. We're going to be keeping an eye on the volume coming in here at higher strikes as well as the gam exposure, particularly at this 250 strike, which could be a big magnet if we see one or two more closes above 200.

[00:04:30]So, this is going to be on the top of our watch list for a potential entry point into Corning for some further upside in the coming weeks. Next, I want to take a look at a name that was popping up on our shortterm bullish filter inside our option flow feature, Rocket Lab. In particular, the 130 calls expiring this Friday on Rocket Lab.

[00:04:52]Rocket Lab's actually a name that we've been trading. We'll take a look at our recent position. Uh but just the move over the last couple of days has seen a huge breakout from around 85 to closing today at 11738.

[00:05:06]And judging by the amount of volume we saw today at higher strikes, it appears that market participants believe there's more upside to go potentially to the 130 or even the 140 strike. Now, as I mentioned, Rocket Lab is a name that we've been trading. We actually had the May 15th 90100 call debit spread, which we sold today for $9.90.

[00:05:26]That was over a 191% gain over the last couple of weeks. $650 profit inside our 10K portfolio. So 6.5% gain in our 10K portfolio in just a couple of weeks. We noted our initial target was at the 100 strike. Of course, Rocket Lab blowing through that. And this is a name that, as I mentioned before, we think there's further upside to go. So we're looking for a re-entry point here. Basically, we're looking to see some consolidation or maybe a pullback to retest this 100 level. That would make for an interesting opportunity for another long position. I would say anywhere between 100 and 105 somewhere in this region here. I'd be looking at another re-entry point, giving it about 4 to 8 weeks either in long calls or a call debit spread for a move back up to the upper end of our GAM exposure range, which would put it somewhere above 140. We're seeing pretty sizable volume relatively speaking for Rocket Lab above the 120 strike as well. So something we're going to continue to keep an eye on. By the way guys, you can track our trades in real time by becoming a member at geeksof finance.com. You can also get a sneak peek of what we're trading right now by checking out our community Discord absolutely free. Links in the description below. Next, let's take a look at Tesla. Tesla another big move today up 3.9% closing at 44504.

[00:06:49]Ever since Tesla's earnings back on April 22nd, we've been seeing a really nice rebound. Tesla beating on EPS and the stock has really responded in kind.

[00:06:59]The largest game exposure concentration at the 450 strike and we're seeing gam exposure growing at the 500 strike as well. We're entering our upper dealer cluster zone here around the 450 level.

[00:07:11]As you can go back in time and see, this was an area where above that level, we saw dealer selling pressure kicking in and investors of course locking in profits above that 450 level. We never quite made it to 500 back here last December. And so the fact that we're starting to see gam exposure and volume coming back in at 500, we could potentially see a move back up to that level to test those highs in the coming months. So this is a trade that we're looking to potentially put on. Uh we're expecting some consolidation around that 450 strike between 450 and 470. And that could make for a really great setup back into that 500 level. And guys, our market FOMO sale is live and active. The market may be hitting new all-time highs, but our discounts are still in effect. You can get an additional $300 off our yearly portfolio manager tier subscription. Use code May FOMO at checkout. This discount's going to be ending soon, so definitely take advantage of it while you can. Members get full access to our GAM exposure dashboard, our option flow analytics tools, as well as our algorithmic trading strategies. And you'll also get access to the premium channels in our community Discord. There's a ton of great members in there sharing their own trade setups and strategies. And you can also track our trades in real time as we manage our options portfolio. So, it's a great resource. Definitely check it out when you get a chance. links in the description below.