JPM Confirms What We Already Knew About 0DTE Trading

This just in from JPM’s Peng Cheng (sick name btw) on the performance of 0dte trading in different timeframes.

1. Recent months have seen a divergence in S&P 500 intraday and end of day (EOD) price patterns - higher mean reversion is observed intraday, while higher momentum is noted towards the EOD. 

Translation: Each session has open, middle and close. At the open there are typically large movements in both directions. However after the open, the price of $SPY will often reverse direction and move back towards its opening price. This is why the opening move does not typically follow through for the entire session. Higher momentum at the end of the day (third session) is the ramp or in yesterday’s case the price dump.

2. Momentum strategies entered earlier in the day have performed poorly, while those entered near EOD have excelled.

Translation: Picking a bullish or bearish direction based on the opening is a stupid idea.

3. Investors continue to sell 0D options, likely causing intraday reversal due to market makers' delta hedging activities. 

Translation: Traders sell calls and puts, then market makers have to buy the contracts and hedge their position to remain neutral. This is why dealer gamma exposure levels flip so rapidly. If a trader sells 5000 $SPY 412 calls at the open, then market makers will buy them and then sell $SPY shares to hedge.

4. This imbalance has increased since late last year and accelerated in April.

Translation: The ping-pong-bing-bong reversals we’ve seen have so far have been massive and they’re only getting bigger.

Under the hood this is what’s happening every single session. Traders sell options, dealers have to hedge and the price action follows.

It’s impossible for the average trader to see this action.

The stock market is rigged.

We’re building RIGD AI to show you what’s happening, when it happens and then the best trades to take.

(more on this below)

Follow the flow and big money positioning or keep drawing squiggly lines on a chart.

It’s your money man - we’ll never tell you how to spend it.

[ zh ]

Tether buys Bitcoin to back $USDT Stablecoin
(oh shit here we go again)

In crypto fading high IQ plays for low IQ is always the best trade to take.

Look no further than the insane runs of $PEPE and now HarryPotterObamaSonice10Inu with the ticker $BITCOIN which is up a casual 8458.70% in the past 6d 12h and 30m.

We didn’t buy this one either but hey even after all of those gains it’s still only at $7.9m market cap with $389k liquidity so what could go wrong with throwing a few dollars in.

The big money high IQ trade has always been to short Tether based on the fact an Italian plastic surgeon is its CEO, they were not backed 1:1 after claiming being backed 1:1, no bank will admit to actually doing business with them and after making billions of dollars they somehow cannot pay for an audit because it would kill their competitive advantage in the stablecoin market.

And while the stablecoin market is smaller now, it’s a risk free money printer with elevated interest rates.

So it makes total sense (kidding but not really) that instead of getting more free money from treasuries that Tether would start investing 15% of its net profit back into bitcoin in God’s good name of diversification.

Tether said the made 1.48 billion in profit in March, which means they’re buying $222 million in bitcoin. Which spins up the narrative that they’re doing the lord’s work offsetting the U.S. government’s sales of Mt. Gox bitcoins which are supposedly coming this year. A false alert when they were on the move sent bitcoin down 7% in an hour.

For crypto natives this brings back memories of a dangerous deja vu when Do Kwon’s $UST backed by $LUNA and the terra blockchain had bought bitcoin to “back” their high apr ponzi scheme.

Summary:

If it didn’t work once, why not try again?

Narratives in crypto mean more than anything else. Tether offsetting US gov’t sales could send Bitcoin back up.

Bitcoin is the king. The king makes the move and everything else follows.

Someone please let us know when the next memecoin is about to go 100x.

[ cnbc ]

RIGD Reports on $SPY

We’re near the end of the first period (the open) and wow imagine that we have reverted back to the mean and the same range we’ve been trading at this entire week.

Options expiry is max fuckery x2 and the big money is bleeding out your puts and your calls while positioning for the move.

The app triggered an alert at 9:33 the yellow candle highlighted below.

Again - if you’re just looking at the chart there’s no way to see what’s actually happening. 

But the flow shows:

4738 - 410 calls sold at the bid (bearish)

1890 - 412 puts swept (bearish)

🤯 🤯 🤯

At 9:33 the price of $SPY was $412.13, RIGD AI triggered the 412p.

9:34AM - 412p - 0.84

9:59AM - 412p - 1.63

96.39% return in 25 minutes if you traded it perfectly and sold at the top!

The opening period (first hour) is now over and $SPY retraced the entire downward move as we revert back to the mean and the traders who chased it and bought puts at the bottom are getting destroyed.

But you use RIGD AI* and are a perfect trader and that would never happen to you right?

(*product not yet available to the public)

thanks for reading THE REPORT by RIGD AI

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p.s. we are hiring a data scientist with experience trading options. is it you?