Option Flow: Calls Emerge from the Dark

In this week’s edition of Option Flows, Tony Stewart is commenting on the recent market movements.

Some rays of light emerging from the darkness.

While Put Skew remains firm on the back of continued protection vs downside global uncertainties, decent clip buying of end-of-Mar and April 75k Calls take advantage of the depressed Call Skew and a contrary directional view.

‘Blue’ 75k Strike dominates as an accumulated Strike over the last couple weeks and increasing over the past few days.

50% of this outright Mar 75k Calls, 50% Mar+Apr 75k Calls bought funded by the sale of Mar+April 60k Puts.

But the market remains 2-way on RRs and <60k Puts.

Dvol (1month proxy Implied Vol) remains firm as Realized performs, and global uncertainties manifest to increased demand for optionality.

Put buying <60k, following on from large 20-40k purchases, and now Call buying at the 75k Strike demonstrate the main contributors.

See original post on X here.