Скачать или смотреть 0DTE Options: Market Movers or Manipulation? Unveiling Hidden Risks

The explosive growth of Zero Day to Expiration (0DTE) options has reshaped the dynamics of the S&P 500 market, with these options now representing nearly half of SPX trading volume. Institutions primarily use 0DTEs for hedging purposes, while retail investors often treat them like lottery tickets, contributing to heightened market activity. This surge has introduced a persistent state of negative gamma exposure, compelling market makers to engage in procyclical hedging that amplifies volatility rather than dampening it. Understanding this mechanism is crucial for analysts and traders navigating today's complex financial landscape.

The debate continues over whether 0DTE options artificially suppress volatility measures like the VIX or create systemic risks during market downturns due to gamma risk and dealer hedging dynamics. Recent studies reveal that the VIX remains a reliable indicator, accurately reflecting real market volatility despite concerns about distortions from zero DTE activity. Furthermore, cutting-edge AI techniques, including obfuscation testing, have demonstrated remarkable ability to identify and predict market maker hedging behaviors purely from raw options data, indicating a new frontier in financial analysis and risk management.

As the market adapts to this new regime of persistent negative gamma, the implications for volatility, risk management, and financial technology are profound. AI tools could become vital early warning systems for amplified market swings, transforming how investors and institutions approach risk. This evolving landscape prompts a critical question: in an era of advanced machine reasoning, should we trust human analysts or AI-driven insights to navigate the invisible forces shaping market behavior?

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