Mispriced Gamma - Settled Longs Opting Delta Ahead of Massive Up
Across the derivatives markets we're seeing lower premiums than we would expect following this possible gamma increase week over week (which is still ahead of full acceptance). With a significant amount of piecewise linear activity with consistent slopes combined with table-and-chair vertical+sideways motion we saw massive volume creating price constraints as the large ships set their sails following the past month of blood in the seas.
If we are in-fact seeing this mis-pricing in Gamma the market would be telling us to short gamma, but, as we know the decentralized liquidity pools are already shorting gamma implicitly if we consider multi-currency effects with Bitcoin as a run-to-safety on either side of the coin from a bear rout to a final upward FOMO. We'd naturally expect intelligent coins to take the opposite side of the trade, then, pricing a significant upward move in Gamma especially at such a relatively low point of volatility.
Simultaneously, interest in derivatives is somewhat low. What does this mean? Smart money is extremely long delta simply waiting for the dark forest FOMO shootout to cycle the underwater turbine lifting everyone. The money held behind which ought to be locked in delta-neutral gamma-long positions is actually preferring the missed gamma opportunity in favor of degenerate breakout trading or the other side, flatting the premiums on top of all-time-high degeneracy.
If we want to play the first bounce following the all-time high then it would be natural to simply make our way into long gamma here with the intention of missing some of the delta in the initial breakout, kicking the can down the line so that we can instead make our way out of this into long delta on the future bounces.
If we are in-fact seeing this mis-pricing in Gamma the market would be telling us to short gamma, but, as we know the decentralized liquidity pools are already shorting gamma implicitly if we consider multi-currency effects with Bitcoin as a run-to-safety on either side of the coin from a bear rout to a final upward FOMO. We'd naturally expect intelligent coins to take the opposite side of the trade, then, pricing a significant upward move in Gamma especially at such a relatively low point of volatility.
Simultaneously, interest in derivatives is somewhat low. What does this mean? Smart money is extremely long delta simply waiting for the dark forest FOMO shootout to cycle the underwater turbine lifting everyone. The money held behind which ought to be locked in delta-neutral gamma-long positions is actually preferring the missed gamma opportunity in favor of degenerate breakout trading or the other side, flatting the premiums on top of all-time-high degeneracy.
If we want to play the first bounce following the all-time high then it would be natural to simply make our way into long gamma here with the intention of missing some of the delta in the initial breakout, kicking the can down the line so that we can instead make our way out of this into long delta on the future bounces.
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