Option Flow: Momentum Fades, Risk Repriced

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

A recognized perk of Options over Perps is avoiding liquidations on a sharp move, and therefore being able to sustain a view.

But sometimes the human element steps in to close a position that no longer appears to have momentum.

After last week’s Call buys, a chunk is purged.

Looks messy; represents buys last week of Jan16 94k,Jan30 98k+Feb100k Calls, and this week a Jan16 94k dump and partial purge of the Jan30 98+Feb 100k Calls. Some older Jan 100k Calls rolled to Mar 125k.

In addition, downside Mar 70-80k Puts bought, some 110-120k Call funded.

Eli12, a far more cautious and less optimistic positioning for Q1 than the first few days gave promise.

25delta Skew has risen from an average of 4% Put premium back up to 7% as a consequence of the last few days’ flows.

Tied in with US hours BTC selling and macro uncertainty.

See original post on X here.