How to Turn $214 into $3,540 in next 2 WEEKS Using GEX💰

Today, I'll explain in detail how each of you can make hundreds of percent in profit. Next month, I'll show several excellent strategies and discuss what will happen with the stock market. First, we need to accept that the key factors driving market movements have fundamentally changed in recent years. This is why the market is ignoring various historical correlations, weak macroeconomic data, QD instead of QE, and high interest rates. In the past, with such a combination of factors, the market would have already been testing lows. However, today, in 95% of cases, only two things influence market movements, liquidity and market makers actions. And these are what we need to track now. Currently, zero day expiration options trading on SPX accounts for over 55% of activity, which is enormous. This means every second option being bought today will be closed today as well. But how does this affect the market? Let's look at the situation from the perspective of a market maker selling the option and a trader buying it. Suppose there's a stock priced at $100 and you decide to buy the nearest call option. The delta of such an option would be 0.5. Essentially, this means there's a 50% probability that the option will end up in the money. This makes perfect sense because if you buy an option with the nearest strike price, the price, all else being equal, has a roughly 5050 chance of moving up or down from the entry point. However, a delta of 0.5 also means that for every option you hold, you'll earn 50 cents if the stock rises. Imagine you buy one lot which includes 100 call options. If the stock rises to $101, you'll earn 50 cents per option. But since you have 100 options, your total profit would be $50. This money would have to be paid to you by the market maker. But if they had to pay out of their own pocket every time, they would go bankrupt very quickly. To avoid these risks, when a market maker sells you a call option, they hedge the trade by buying the underlying shares equivalent to the delta. In this example, the delta is 0.5, meaning the market maker will buy 50 actual shares. If the stock rises by $1, they will make $50. I think you get the logic since 50 shares multiplied by $1 equals $50. However, your call option also generates a $50 profit. And if you decide to close it at that moment, the market maker immediately liquidates their long position in the shares. In other words, they sell the shares, lock in a $50 profit and pass it on to you right away. Thus, the market maker doesn't earn anything from the stock's rise. Their only profit comes from the commission you paid when buying the option. This was a very simplified example. In reality, everything will be more complex. But the general idea is that regularly buying call options encourages the market maker to continuously buy more and more shares and provide more and more liquidity. This is exactly what triggers market growth. Even though most macroeconomic indicators signal a recession, and in the past, in similar situations, the market fell. At first glance, it may seem that in this new reality, the market is doomed to perpetual growth. Everyone will buy call options, forcing dealers to purchase actual shares, which means buying will dominate the market, and thus it will keep rising. However, there are two nuances. First, this pyramid can only exist as long as more call options are bought tomorrow than are closed today. Because when you close an option, the dealer sells shares. So if fewer call options are bought tomorrow than are closed today, fewer shares will be bought than were sold today. Meaning selling will start to dominate the stock market and it will begin to fall. The second problem is that the higher the market rises, the more expensive the stocks become, which means options will also cost more. For example, if a stock is priced at $100, a call option might cost $60. But if the stock rises to $400, the option will also become more expensive, meaning fewer traders will be able to afford it. And the very risks we discussed earlier will emerge. If selling starts to outweigh buying, the market will begin to fall. To prevent the market from falling for as long as possible and attract new option buyers, market makers begin reducing volatility. The thing is, the price of an option depends not only on the stock price, but also on implied volatility. The lower the volatility, the cheaper the option. Let's look at this example. In April 2022, Microsoft was trading at around $285. Imagine you decided to buy a put option expiring in 18 days with a strike price 5% below the current price, meaning you were betting that within 18 days, Microsoft would drop by 5% or more. A 5% drop from the price would set the strike at $270. Back then, this option cost $3.75, or $375 for the full position. But now let's see where Microsoft stands today and what's happening. Currently, Microsoft is priced at $525, nearly double its previous value. Lets assume, just like in the previous example, that we expect it could drop by 5%. There's a small nuance here. In the first example, there were 18 days until expiration, whereas now there are 16. At the time of recording this video, no other expiration date was available. But this isn't critical because a two day difference won't significantly impact the price in this case. So suppose we expect that within 16 days Microsoft stock could drop by 5% or more and we buy a put option with a strike of $500. Right now that option costs $1.77, or $177 for the full position. Let me say it again. The stock is now twice as expensive as it was three years ago, yet you're paying $200 less for the same position. The reason lies precisely in implied volatility. Three years ago it was nearly 33%, while now it's just 18.5%. It might seem that now, surely the market will never fall. Because if market makers keep lowering volatility, options will become cheaper, allowing more traders to afford them. This in turn means market makers will have to buy even more actual shares as a hedge, pushing markets even higher. However, this theory has two problems. The first is that when a stock price rises and volatility decreases, options do indeed become cheaper for you. You can afford to buy more options and the market maker will indeed have to buy more shares. But since the stock has become more expensive, the market maker will have to spend more money. And despite having vast liquidity providing capabilities, there may come a point when liquidity starts to run short. To obtain it, they will have to sell previously purchased assets, which in turn leads to a spike in volatility, a rise in the VIX, and consequently a more rapid market decline. The second problem is that many people forget that the market maker doesn't actually have an obligation to constantly push the market higher. Figuratively speaking, they don't really care which way the market moves because they only make money on the commissions they earn from selling options. When the market maker acts as a stabilizer and reduces volatility, it means they buy on pullbacks and sell on rallies. During this period, the market exhibits a smooth upward trend with alternating downward and upward movements. This is exactly what we've been observing lately. Meanwhile, the VIX declines, barely reacting to intraday corrections, and traders feel completely at ease. But as soon as the trend begins to reverse, the market maker starts doing the opposite. They sell into a declining market and buy back. During rallies, volatility begins to rise and each subsequent selling cycle becomes even more impulsive. To trade successfully, our goal is to align with the market makers actions. We can track their positioning using the Gamma exposure profile. This gives us insight into likely market movements and lets US peek into the inner workings of the market, a decisive advantage when making trading decisions if this is your first time hearing about this, I recommend checking out the dedicated playlist on this topic. Covers everything in detail and will answer all your questions, but let's look at a couple of examples in the Quant Power app linked below this video the gamma exposure profile updates several hours before market open, giving you a strategic edge right from the opening bell. When analyzing the upcoming trading session, we determine the market backdrop, key support and resistance levels, as well as the levels toward which the price will gravitate if the day starts in positive gamma territory. In other words, if the price is surrounded by blue columns, this indicates that the bulls will control the day. In such a scenario, we can identify an upside target, the largest values of positive gamma. If the level of maximum positive gamma also coincides with the peak absolute gamma, the level becomes even more significant and you can confidently open a long position toward it. As for the nearest support level, we can highlight the gamma flip zone, the point where gamma shifts from positive to negative. This level will always carry special significance, and if the price drops to it, it will be an excellent place to open long positions toward the maximum positive gamma values. An example of such a day was Tuesday, August 12th. SPX opened around the 6400 level. If we look at the gamma exposure profile, the price was positioned right here as the nearest support. We identified the 6390 to 6380 level, the gamma flip zone. The largest positive gamma values were concentrated at the 6450 level. When we examine the absolute gamma distribution, we can see that the highest values were also clustered around 6450. Looking at this setup, it was immediately clear that the price was in positive gamma territory, meaning the bulls would control the day. And considering short positions in such a scenario would be unwise. For additional confirmation, we could activate the most powerful tool in our arsenal, the power zone button. If you're unfamiliar with this, it was covered in detail in previous videos. This is a unique feature that highlights two critical things. The first is the maximum value and the second is the range. Speaking of the range, if we visually select for ourselves a square within which the largest values will be concentrated, then this will be the range within which the day will be traded. The maximum values indicate the level where the price will aim. If for some reason the price moves outside the range, it will be a strong signal for us indicating that an anomaly is being observed. And we can open a position by betting that the price will reverse and Move toward the maximum values of the power zone. Here we can see that the most interesting part ends at the 6,455 level, after which a decline begins. As for the lower levels, the most interesting part ends at the 6400 mark, followed by another decline. The largest power zone values were at the 6440 strike. Thus, on that day, we could have proceeded in two ways. Either open a long position immediately, expecting the price to rise toward 6,440 to 6,450. Or if a pullback occurred, open a long from the gamma flip level at 6,380 to 6,390, which would have been the best entry point in the end. If we look at how the price moved that day, we see that early in the day the price reached the gamma flip zone, tested this level as support, then began to rise, and the day closed at 6445, right where the maximum values of the positive gamma, absolute gamma and power zone were located. Let's look at another example of how the power zone indicator plays out. On our website, there's a chart where all key levels are automatically plotted. The green line corresponds to the largest values of positive gamma. The red line N1, represents the largest values of negative gamma, and the purple dashed line marks the largest values of absolute gamma, and so on. This is designed for easy reference, making it immediately clear where the price stands relative to key levels. However, there's also the quant power line. This line corresponds to the maximum values of the power zone and it is a magnet to which the price will strive. Here we have the SPX chart from August 15th. At the start of the day, the quant power line was at 6450. The price approached this level, lingered there for a couple of hours, and then began to rise. However, the quant power line did not shift, signaling that the price was likely to reverse. And that's exactly what happened. Toward the end of the trading session, the price started declining and closed right at 6450, where the quant power line had been anchored all day. This is the gamma exposure profile chart for Thursday, August 14th. I strongly recommend you watch this video because there was an absolutely identical situation and I explained in great detail what to do and why on such a day, so we won't go into a detailed breakdown. Now let's focus on the key points. The largest positive gamma values are at the 6490 level. The largest negative gamma values are at the 6440 level. The gamma flip zone is in the 6455 range. If we look at how absolute gamma is distributed, we see two identical clusters that align with the maximum positive and negative gamma values, which further strengthens these levels as support and resistance. And when we see a day like this, where gamma values form a clear range within which the price will move, we can open an iron condor right at the start of the trading session and set breakeven points at the support and resistance levels. Earlier we discussed that when the price is in positive gamma territory, it means market makers act as market stabilizers. They will buy the dips and sell from resistance levels above. Generally, such days are perceived as bullish. Here the situation is different. The market maker is no longer pushing the price higher, but they're not yet ready to switch to selling. Instead, they create an artificial range and try to keep the price inside it for as long as possible. This is why neutral strategies work very well on such days. If we click on the power zone button, we can see that the highest values were at the 6460 and 6470 levels, which further confirms that the price was likely to stay in the middle of the range between positive and negative gamma levels that day. SPX opened at 6,449 and closed at 6,468, just two points away from the strongest power zone values. And now let's move on to the most crucial part of this video and I'll tell you how to make hundreds of percent in profits over the next month. We already know that when the price is in positive gamma territory, the overall market direction tends to be upward. Even if we see a decline on such a day, it usually stalls at support levels. And this pullback should be viewed as nothing more than a correction within the broader uptrend. When we see a setup like this, it means the price is being held in a range. However, even on such days, volatility continues to decrease. This tells us that, roughly speaking, there's no longer enough momentum to push the market higher. But there's still an effort to prevent it from falling. Once the price shifts into negative gamma territory, which will inevitably happen, volatility will immediately spike and we'll see an acceleration in the market's decline. Thanks to the gamma exposure profile, we can clearly gauge the dominant market sentiment. Right now, the price hasn't fully transitioned into negative gamma yet. So from this perspective, it's still too early to say that a full blown market drop is imminent. However, based on indirect signals such as declining volatility combined with increasingly frequent range bound behavior, we can expect this shift to happen very soon. Thus, against the backdrop of the overall market situation and the declining vix, buying insurance, or in other words, betting on a market decline in the medium term becomes very profitable and mathematically justified. Let me show you what I mean. For clarity, I'll first demonstrate an aggressive approach and then discuss the trades that will be opened. As an example, here's the most basic option strategy A bear put spread on Spy. The expiration date chosen is September 19th. A put option with a strike of 600 is bought and a put with a strike of 597 is sold. When buying one lot, this position will cost only $18. At the same time, if the price falls below the breakeven point by expiration, this trade will yield a profit of $282 or in percentage terms the return would be over 1,500%. In this example, it might seem that the breakeven point is very far away. The price is currently here, while the breakeven point is about 7% lower. That is indeed far. But first, I'm using this example for clarity. And second, even without considering the gamma exposure profile, there are several additional factors in favor of a more substantial correction. First, September and October, just like March and April, are statistically the weakest periods of the year. Even looking at history, all crises and recessions, if there were preconditions for them to begin, always started either in September, October or March April. Similarly, all major bank bankruptcies have occurred during these two periods. Plus in the fall, the fiscal year ends and fund managers begin rebalancing their portfolios. This doesn't mean a crash is inevitable, but it does suggest these factors could add volatility. The second factor supporting the likelihood of a 6 to 10% correction in the near term is simple logic. Any impulsive move is always met with a pullback. Take 2020 to 2022 as an example. It was one of the most favorable periods for markets in history. The government was handing out money directly to people, rates were at zero, and the Fed was printing $120 billion a month. In such an environment, the market had no reason not to rise. Yet if we look at the chart after the V shaped recovery but even before SPX reached new all time highs, there was a 10% correction. After the highs were breached, there were two consecutive corrections of 10 to 11%, then another rally followed by another 6% pullback, and so on. What I'm saying is that even in a strong bull market, when all conditions favored further upside corrections of 6 to 10% were completely normal. Over the past few months, we haven't seen anything like that. Even the late July dip didn't exceed 3% and it wasn't a true correction, just two isolated down days. So betting on a downside move now isn't unreasonable. But the key point is this. In the current market environment, the potential reward vastly outweighs the risk. If I'm risking 100% for a chance to make over 1,500%, I can afford to be wrong a few times. Because when the move finally happens, it won't just cover the losses, but also deliver huge gains. Put simply, if the market doesn't drop by mid September and instead rallies from current levels, this trade will obviously lose. But by September 20, the market will be even more expensive, volatility even lower, and I can reopen the same position with an expiration shifted to late October or early November. The bottom line is that SPX is now at a point where statistically and mathematically opening such positions is just it would have been foolish in May, June or July. Back then the trades were more expensive and the odds of a downside move were much lower. But let me show you a couple more strategies that I'm personally opening. First, a long put butterfly on spy. The expiration is September 19th, and here you can see the strikes I'm buying and selling. Unlike the previous example, the breakeven point is much closer, just about 4% below the current price. If a downward move materializes, no matter how deep the drop, the profit will be nearly 700%, which is very solid. Of course, if the market starts declining soon, you don't have to hold this position until expiration. You can close it early and lock in profits. I'm also opening one of my favorite strategies, a diagonal put spread on spx. There's a slight nuance here. Since the strategy uses nearer dated expirations, it won't always close profitably because there's no guarantee the price will drop within the next week. But this is more than compensated by the high profit potential and a very close break even point. In this case just 0.8% below the current price. If the market starts moving down, this strategy will generate profits very quickly. Additionally, as I mentioned earlier, this setup is extremely cheap, even by SPX standards. If anyone thinks it's too expensive, you can build a similar strategy on SPY or XSP where it could cost almost 10 times less. You can also add a bit of safety by pushing the expirations slightly further out, say August 29th and September 2nd. Either way, given what's happening with volatility and how cheap these positions are, opening them now is simply a good deal.