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There is no question that negative gamma can accelerate nasty moves (at least in commodities where I’m involved). Maybe what you mean is negative gamma that is

There is no question that negative gamma can accelerate nasty moves (at least in commodities where I’m involved). Maybe what you mean is negative gamma that is given to people as a “trap” and then the exploiter pushes the market towards the calls intentionally. That might be harder to do (would take tremendous might in any large market, like oil). Where negative gamma occurs more often is, for example, Oil producers buy tons of puts from banks, the market weakens and oil goes down, and the banks are forced to delta hedge their position aggressively. This isn’t a trap set by producers, it’s just the market positioning. Our adage is “the market goes to whatever level fucks the most people”.

kevstev 5y ago
Yeah I mean the effects of gamma aren't controversial, but the whole concept of being able to move the market with social media posts to force it to skyrocket, that is more dubious to me. The GME stuff was essentially as far as that concept has ever been taken, and that particular scenario didn't play out- so while theoretical, I don't think this is a real thing with any significant effects. The whole thing about manipulating financial markets for "lols" is just kind of strange to me- and it all feels very dishonest. I have been on WSB for years and occasionally look at stocktwits, and while it used to be mostly harmless, a lot of loss/gain porn, a lot of bad insight, but the occasional nugget of some solid research... it just feels sinister these days. Are these guys really in it for the lols... or secretly hoping to get rich and keeping an eye on their internet friends to ensure they get out before their friends do? In general though, its not really clear to me who on these financial forums are the manipulators, the manipulated, or just truly clueless. But it's all just kind of upsetting, as it becomes clearer that the internet is spiraling towards ever increasing manipulation.

kevstev 5y ago

Yeah I mean the effects of gamma aren't controversial, but the whole concept of being able to move the market with social media posts to force it to skyrocket, that is more dubious to me. The GME stuff was essentially as far as that concept has ever been taken, and that particular scenario didn't play out- so while theoretical, I don't think this is a real thing with any significant effects. The whole thing about manipulating financial markets for "lols" is just kind of strange to me- and it all feels very dishonest. I have been on WSB for years and occasionally look at stocktwits, and while it used to be mostly harmless, a lot of loss/gain porn, a lot of bad insight, but the occasional nugget of some solid research... it just feels sinister these days. Are these guys really in it for the lols... or secretly hoping to get rich and keeping an eye on their internet friends to ensure they get out before their friends do? In general though, its not really clear to me who on these financial forums are the manipulators, the manipulated, or just truly clueless. But it's all just kind of upsetting, as it becomes clearer that the internet is spiraling towards ever increasing manipulation.