Market sentiment took a significant hit this week, with dealers shorting gamma in the front end of the options market. This move has been one of the sharpest drops we’ve seen in recent history, with a staggering $7 billion difference between sessions. Our client base is feeling weary about the current state of the market, and it’s difficult to blame them given the lack of clarity surrounding global macroeconomic factors.

The straddle for month-end saw a significant increase, reaching around 1.09%. This suggests that investors are taking a cautious approach to the current market volatility, and are hedging their bets in case of further price fluctuations. The short gamma position taken by dealers is likely a result of their attempt to manage risk in an uncertain environment.

It’s worth noting that this type of movement in the options market can be a sign of heightened volatility, and it’s important for investors to stay vigilant and adapt their strategies accordingly. While the current situation may be unsettling, it’s essential to remain informed and proactive in managing risk.