SpotGamma helps adjust traders’ expectations in accordance with the aforementioned. When long gamma, they hedge by selling into strength and buying into weakness.
When short gamma, they hedge by buying into strength and selling into weakness. “Embedded in that is gamma is high, and where are the big support and resistance lines,” he added in reference to the analysis of key levels, derived from open interest and proprietary volatility models.įor clarity, gamma, or convexity, is the sensitivity of an options risk to direction, given underlying price changes.ĭepending on how participants are positioned, the opposing side of options trades - market makers - will be long or short gamma. “The most important thing we do is give an estimate of volatility for each and every day,” Kochuba said. The Core Offering: A twice-daily note consumed by traders at the retail and institutional level. Given that the S&P 500 is such a large product, Kochuba was confident he could share his models without giving away an edge in 2019, he founded SpotGamma to help traders better gauge market opportunity. “I built out these models and was designing some trading strategies around them.” “You can take the options market structure and draw some very basic conclusions for the direction of the market and volatility,” he explained. When the family office didn’t pan out, Kochuba was left with nearly 15 years of sell-side experience. Thereafter, Kochuba continued his work in the options space, developing models for a family office. Kochuba, alongside SpotGamma co-founder and CEO Matthew Fox, spoke with Benzinga about these dynamics and how their platform helps gauge market opportunity.Ībout: Prior to founding SpotGamma, Kochuba worked in investment banking and options market making at Banc of America, the investment banking subsidiary of Bank of America Corporation (NYSE: BAC), Credit Suisse Group AG (NYSE: CS), and Wolverine Execution Services.
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