0DTE Gamma Strategy - Ultimate Edge No One Knows About transcript

Price action is all you need. We all heard that statement, whether it's about ICT, Bollinger Bands, technical analysis, it's all the same. It's all false. Well, what if I told you there's a way more precise ways to see what's actually happening in the markets and see beyond candlesticks. The option still concepts that I'm going to demonstrate you today are nowhere else in YouTube. You will not find them there. They're coming from my market hours and from my research.

So, by the end of this video, you'll be able to repeat these trades from my trading month. Before we even begin, let me show you the market maker's perspective. This is coming from an institutional CBOE licensed tool. So, this is exactly how dealer views price action and markets. So, when a dealer sells you an option, they're exposed. So, they hedge by buying or selling futures on the underlying. You can see this exposure on the screen.

Price moves, their delta changes, they have to trade again to rebalance. So, their goal is not to make money by trading. Their goal is to create markets because they're market makers. And let me ask you the question, do you really think that you can beat these markets just by looking at a simple price action or RSI indicator? Because I don't think so. But you might be wondering, why does this guy even talk about options?

We're trying to trade futures, stocks. We're trying to trade ES, NQ, pass these accounts. Well, let me break down the numbers and let me explain to you how all of that connected. From 2000 to 2019, 19 years in the US options market grew at about 11% a year. From 2019 to now, roughly 25% annually, more than double the pace. So, it's on the way to become the biggest financial market ever existed. And what's the most important thing about that is zero DTE options, right?

So, in 2016, zero DTE options, same day expiry, so on same day uh when the option expires on the same day, that's called zero DTE, made up about 5% of all SPX volume. In 2023, 43% from 5% to 43% in just 7 years. Nowadays, in 2026, zero DTE options make up roughly 50%, but up to 60% of overall SPX volume. Sometimes, it comes up to 70% even. So, it's a very very major market, and it is directly connected to futures market because of dealer exposure.

This is how basically order flow gets created on futures. That that information that you see on futures, it comes from this dealer hedging from options markets. But, here's what makes zero DTE different from regular options. On expiration day, gamma is at absolute peak. So, delta doesn't really slowly drift, it snaps. Near a strike with zero time left at delta of, let's say, 0.2 can jump to 0.8 on a five-point move. That means dealers are not doing light gradual rebalancing.

They're aggressively hedging every tick every few minutes. And now, imagine 65% of the entire SPX options complex doing that on the same expiration day. That's the force behind those sharp explosive moves even on the futures, as I already explained, when there is no earnings, no news, no fundamentals, just pure dealer mechanics. To track real-time options flow correctly and precisely, I use QuantData. So, my main assets there are QQQ and NDX.

I look at both assets to be very precise on NQ. And also, my two favorite instruments are net shift and interval gamma exposure map. So, let's look at the interval map and see how that works, why it's important. So, it's essentially showing the hedging pressure in the markets. And as you remember, we got different gamma conditions. So, first gamma condition is a positive gamma exposure. You can see green areas on the screen right here.

That means that dealers are buying dips and selling grips. But, you always have to combine with all these different tools that you are using to have this bigger picture. It's not like it's When it's positive, it's going to be range. Or when it's negative, it's going to explosive, right? Second regime is negative gamma exposure. This when dealers are chasing moves. It's way better environment to hold runners, I'd say.

And last thing is near zero or approaching HPL, meaning gamma flip point. So, this is when dealers are transitioning. And this is key level. So, as you can see right here on this interval map, we've had lots of positive gamma above that 574 level. And below, um it's all red. So, that means that we are under negative gamma under this four 573 574s. And the reason why I emphasize using real-time gamma exposure, you can see that as day passes, we gained some significance around this level.

So, our positive gamma exposure got bigger. And after that, we can see around 3:00 p.m., we've had this major major move out there. So, we've had this $3 $4 move afterwards, which is very nice longing opportunity. So, this is exactly a reason between end-of-day levels and real-time levels. Real-time levels are way more sophisticated, way more precise because you can really track them um in the real time, and that's the whole thing of gamma exposure.

It cannot be static. Next tool that you have to combine with gamma exposure to be way more precise is a net drift. So, net drift measures the net premium flow coming into the market real time, not what just happened yesterday, last week, but who has been winning the options market all day up to this moment. When net drift is rising and positive, that means that net call buying and put selling. Dealers have to hedge by buying futures.

It's a bullish flow. When net drift is failing and negative, that means net put pressure. Dealers hedge by selling. We are under a bearish flow in futures. And as you can see on the screen, we've had that flip. [snorts] So, that's a that's called crossover. We've had that flipped, and we see that puts are failing and calls are dominating. That's absolute dominance from calls perspective, and we can see this representation from price action.

We are going up. And we already seen the numbers. 60-65% of overall volume comes from 0 DTE. Net drift is measuring the net direction of that enormous flow. You always want to go with the flow, not against that. So, for example, when a net drift turns bullish at put support level, dealers are trying to hedge, and the flow confirms buyers are in control. These signals are aligned, and this is your confirmation to go and look for a setup.

When net drift rolls over at call resistance, dealers are trying to hedge. Flow confirms sellers. same logic here. That's just other direction. That's another confirmation for you. Same goes for breaking retest, for example. So, if we have that major core resistance level sitting here, but net flow is very, very bullish and we break out this level, come back there, breaking retest, this is your confirmation to go and long this level because this is how the order mechanics work.

Here's an example how you can actually capitalize on these mechanics and how I capitalized on it on Friday and I took this 114 points trade uh on NQ, $3,000, $15,000 across five accounts. Not bad, but you know, we dropped 1,400 points and I could have done better. So, you can see on my Discord, I posted pre-market plan. So, read the last sentence. If at the open, we see put dominance with aggressive order flow through that 730s level, we have no business trying to buy before we reach 29,700.

So, you can see how I combine this logic from options markets with uh our NQ futures market. And I actually use order flow, um if you don't know, to confirm my trades and combine it with volume analysis. So, here we're going to stay on the QQQ chart. You can see that is 730 level. And I also had 732s. All right, if you just take a look at these candlesticks, nothing was telling us that 1,400 point drop was incoming. And even more, at the open, we had the aggressive opening with FVG, everything, you know, A+ setup.

But let's just look beyond candlesticks and see what actually happened, right? So, I always look at Delta first, and what we can see on the Delta, that's right at the open, we see that we are very, very negative. So, none of these strikes are as significant and as these right here, right? So, we can say that dealers are very bearish. So, that's saying to me that puts are in dominance now, because I see how dealers are positioned.

And furthermore, gamma exposure map is confirming that. So, for example, on NDX, you can see this major level of 30,000, it's around 200, yeah, 190, 160 million, um, worth of negative gamma exposure. That's a very, very major level. Once we break it, or once we respect that level, we can see some huge, huge expansion. And same thing on QQQ. So, I like to combine these two assets. So, NDX is more institutional volume, QQQ's like options volume.

As you can see on QQQ, as you remember from my pre-market plan, I said that if we're going to dip under the 730s with aggressive put dominance that we're going to analyze with Net Trive, we are going to see no gamma exposure until roughly 29,700 or like 800. And this is exactly what happened. You can see on NDX when you reclaim that level aggressively around 940s, that was my entry. And then, on QQQ, same thing. Once we reclaim that level, this is my sign that I have to look at Net Trive to can my trade.

So, if you look at net shift right here, you can see that on QQQ, we've had this crossover right here, around 940s, right? This is the um point in time where puts became dominant, right? Calls went underwater. We see lots of negative volume. So, you see how I combine every single thing that I have in my arsenal to just say, "Yeah, we're going to be bearish." I can take that trade. And this is exactly how I capitalized on that trade.

So, here we broke this 30,000 level, which is roughly uh 2950 on QQQ, came back to that POC right here. That was my sign to uh enter that trade. So, here is the QQQ chart again. Here are my zones from volume profile. It can be very hard to understand all these concepts. This is exactly why I created my free Discord community. I'll drop the link in the description. I always drop my daily pre-market key levels. I break my trades down.

And also, this weekend, I'm going to drop my private template and my filters, which is most important on Quant data. So, check this out.