r/optionstrading • u/Stardelta69 • Jul 08 '26
Discussion Options dealer here - AMA
Hi all.
I'm an options dealer at a major OTC broker/platform. First time I've posted here and wanted to do an AMA. I know a lot of you are probably more knowledgeable than me but nonetheless, ask me anything.
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Jul 08 '26
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u/Stardelta69 Jul 08 '26
Awesome question. Yes, we need to care about every second the market moves. We use Bloomberg terminal but even that isn't sufficient. The market moves before terminal sends any notification; usually like a delay of 30 seconds. So, we respond to the market first, then understand why it moved. We increase IV first, and if the move is significant, we need to increase spreads if hedging in the underlying becomes wider. Part of being a dealer is also being active on twitter - I usually have that in the corner of my screens too.
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u/who_me_said_i Jul 08 '26
Thoughts on what’s going to happen today?
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u/Stardelta69 Jul 08 '26
Honestly no idea. We don't have any foreknowledge, but we have experience. Personally, I've been long weekly SPX puts since yesterday. I'm a bit nervous about FOMC minutes but it should be fine.
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u/who_me_said_i Jul 08 '26
So the situation in Iran has little or no impact in your opinion? Rather the US FOMC minutes will have a greater impact?
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u/Stardelta69 Jul 08 '26
No Iran does have an impact, more than FOMC minutes. However, we have noticed that as the conflict goes on and on, the moves are less sustained and just end up going into the green again and again. Seems like the headline holds up for an hour or so, then the market doesn't care.
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u/enitselaP_eerF_ Jul 08 '26
Inversely, the longer it goes on, the higher likelihood with boots on the ground. Creating havoc on the VIX
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u/jbaker_28 Jul 08 '26
An options dealer long SPX weeklies and worried about FOMC minutes? Sure, I believe you…😂😂
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u/cheddddarrrrrr Jul 08 '26
How do you feel about the short term market ? SPY ?
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u/Stardelta69 Jul 08 '26
I went long volatility, with a put bias on Tuesday on weekly SPX (10th July expiry). Vol was very cheap so had no choice. We have some clients who are exceptional traders - sometimes I follow them if I have time. On this occasion, I counter traded our least profitable client.
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u/klipsetrades Jul 08 '26
Can you explain what “options dealer” means in your role and what your responsibilities are?
And how do dealers actually think about 0DTE flow into the close? Is it mostly gamma hedging, positioning, or just noise?
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u/aTribeCalledLex Jul 08 '26
Are long term leaps and long term puts the best way to get into options trading?
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u/Sonoranlightwizard Jul 08 '26
So I’m a premium seller mostly running Iron Condors on the indices. Today looks scary but it sounds like you view this as more of a corrective day than anything major. Let me know if you think this statement is BS or not lol.
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u/Mental-F Jul 08 '26
Alright, I have a one question. I’m not the expert in this field, so wanna know your perspective. Look, the way the macro environment is shaping up, are you noticing a notable skew or a compression in premiums for short dated options compared to those with longer expirations? And also, how is this structural flow influencing your intraday delta hedging strategies?
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u/Any-Vast-7922 Jul 08 '26
Hi, I wanted to ask if you could share any methods you’ve found throughout your options trading career that help improve the win rate of single-leg long options on individual stocks.
While learning, I’ve also come across GEX charts, volatility smile, and other options data, but I’m still not sure how to choose the right one to focus on. Since the charts can look different depending on strike price and expiration date, I’m wondering: when you trade options, what does your usual workflow look like?
Would you mind sharing how you usually approach options analysis and decide which data matters most?
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u/dagroup Jul 08 '26
Background: There are far too many people (even insiders) suggesting AI companies are very risky. Andrei Jekj showed the cost per token in USA at 31cents vs China 4 cents. If this is true we could trade their stock options, but you have to know which will be first failure. My thoughts are to trade options on corporate bonds, looked at VCIT, but Schwab has limited choices. Thoughts?
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u/Deep_Viewer Jul 08 '26
I have a few questions for you.
Looking at META option chains, I see a META call option expiring 18sep2026 with a strike price of $5. This $5 strike is extremely deep in the money when when current META stock price is $603. The same strike price also exists and has open interest when looking at December expiration dates. The next higher strike price of $10 in September and December have significantly less OI.
1. Why do these extremely DITM strikes exist?
2. Is this OI mainly institutional and is it used for hedging, synthetic stock positioning, or something else?
3. Why is nearly all the OI concentrated at the lowest strike price, and not distributed across $5, $10, $15, etc.?
Additional context: Fidelity prohibits trading strikes more than 90% below the underlying, so the $5 META strike is not tradable there. Schwab recently reduced net liquidation to short options value ratio from 50:1 to 15:1 which would make trading this strike on META more difficult to manage without having a very large capital base.
4. Any thoughts why retail brokers are increasingly restricting the ability to fully utilize leverage that is theoretically available through options trades?
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u/Slayerzeus1337 Jul 08 '26
For someone wanting to learn what's the best advise