In this week’s edition of Option Flows, Tony Stewart is commenting on the fading rally and the overall final into the end of the year.

December 29

Santa rally fading, BTC Dec31 46k Puts bought, anecdotal rumblings of Tradfi LP allocation audits into EOY, making for a captivating finale as Dec31 Options roll and completely detach into Jan bullishness: Jan7 50-53k Call spread, Jan28 55k Calls + Jan 1×2 Call spreads bought.

2) Evidence of unwilling balance sheet harvesting is surfacing at a Fund LP level into EOY.
Although midnight window-dressing may provide fireworks, the lights are dimming for some recent Dec31 Call buying, but shine bright for Jan where upside demand is observed.

Jan IV >60% RV.

3) The large Dec31 Option Open Interest is expected to continue being rolled to Jan, reinforcing the Jan bump on the term-structure curve created by Jan Call buying, growing apathy ahead of Dec31 exp & general RV+IV drift.

Call predicated expectations of early Jan move in play.

View Twitter thread.


Tony Stewart Tony Stewart

ex-MS Head of Trading desk /BTC Vol. Prop trading /Option Market forensics/ Alter Ego account Digital Asset arena. Tweets are my opinion, not financial advice.