Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by eyx on Monday January 11, 2021 @05:53PM
(#25738929)
That's the theory, it's not my point.
My point is that a market maker will not carry an option position that is impossible to hedge due to the underlying liquidity. In other words, he will not carry a gamma position that is not "in line" with the liquidity of the underlying.
I may be wrong, but the article is about buying a lot of short dated (high gamma) call options from a market maker and hoping that he will drive the market up while hedging his position.
My point is that a market maker will not carry an option position that is impossible to hedge due to the underlying liquidity. In other words, he will not carry a gamma position that is not "in line" with the liquidity of the underlying.
I may be wrong, but the article is about buying a lot of short dated (high gamma) call options from a market maker and hoping that he will drive the market up while hedging his position.