Skip to content

Options flow and GEX: reading SPX context to trade ES and NQ

Module 01 · 1 · Why SPX drives your ESLesson 3 of 318 min🔒 Students only

On the other side: a player with no opinion

What an options market maker does

The market maker (dealer) continuously quotes a bid and an offer on thousands of strikes and expirations. He does not choose his positions: he inherits whatever clients leave him. If clients buy puts, he ends up short puts. If they sell covered calls, he ends up long calls.

His job is not to bet on direction. It is to earn the spread and to neutralize the directional risk imposed on him. He does that by selling or buying ES futures until the delta of his book is close to zero. Then price moves, the delta is no longer zero, and he starts over.

Student access · free

The rest of this lesson is for students

Also in this lesson
  • Three properties that change your read
  • The other players in the same book

It's free: join the Discord, click the Student role, then log in with Discord here to access all courses.

→ Delta, or how many ES to hold