An Unprecedented Lack of Liquidity | What the Options Market Tells Us About What Comes Next
The OPEX EffectApril 19, 202500:59:36

An Unprecedented Lack of Liquidity | What the Options Market Tells Us About What Comes Next

In this episode of The OPEX Effect, Jack and Brent dive deep into the market turmoil following "Liberation Day" and the implementation of new tariffs. With volatility spiking to levels not seen since the 2020 COVID crash, the hosts analyze how options markets are reacting, why liquidity has evaporated, and what investors should expect in this new higher-volatility regime. The conversation covers everything from VIX behavior to options positioning, and provides critical insights for navigating these turbulent markets.

Key Topics Covered:

The recent market volatility spike and why this represents a fundamental "regime change"
How options market makers are reacting to the tariff announcements and subsequent 90-day pause
Why liquidity has disappeared from markets and its impact on price movements
The significance of this month's options expiration and VIX expiration
Why zero-DTE options are NOT the cause of recent volatility
Technical support and resistance levels based on options positioning
Gold's recent surge and signs it may be ready for consolidation
The impact of increased correlation across asset classes
Expectations for upcoming earnings season and its importance in this environment

Timestamps:
00:00:00 - Introduction and recent market events
00:02:59 - Discussion of market volatility and regime change
00:08:56 - Brent's recent appearances and the "Captain Condor" story
00:12:10 - The OPEX cycle explained and current positioning
00:15:40 - April OPEX size and significance
00:18:40 - Predicted volatility and gamma impact
00:21:02 - VIX expiration ahead of OPEX significance
00:25:38 - Why volatility has spiked after Liberation Day
00:30:27 - Liquidity crisis and market moves
00:33:49 - Realized volatility hitting COVID-era levels
00:39:00 - New volatility normal and regime shift
00:46:45 - Zero DTE impact (or lack thereof) on volatility
00:49:38 - Support and resistance zones based on options positioning
00:50:53 - Upcoming earnings season significance
00:52:51 - Correlation across asset classes
00:55:48 - Gold analysis and potential consolidation
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