Macro Theme:

Key dates ahead:

Founder’s Note:

ES futures are flat, NQ futures are off 80bps.

The KOSPI was –10% today, which is weighing on US tech stocks. With that, the index is down -55% in a month. Below we’ve plotted KOSPI (candles) vs DRAM (blue) and SMH (green), and you can see that these have all moved in sync. While we are far from experts in Korean market dynamics, it does seem that Korean’s used a lot of leverage on the way up – and that is exacerbating violence on the way down. That being said KOSPI is dominated by 2 AI-hardware names: Samsung and SK Hynix – which are +50% of the index. We have been trading longer dated OTM put ratio spreads in EWY & SKHY which have been working decently. Megacap earnings tomorrow certainly play into this: these hardware names thrive on CAPEX.

With AM tech weakness assigned, we note that negative gamma now envelops the SPX. The gamma flip point remains the same as yesterday: 7,480. Yesterday’s open did showcase a fair amount of opening volatility as the SPX dropped ~1%, but that simply mean reverted the index back to Friday’s closing levels. Yesterday’s lows were also supported by the big 0DTE condor/put spread at 7,385 (see PM note). The SPX continues to be much more stable vs the NDX, but the negative gamma below suggests that the SPX could as some point be vulnerable to a sharp decline.

Despite the weak price action, the SPX >=1-month vols have been fairly stable since Friday (this AM teal vs Friday PM gray). Short dated IV’s are elevated due to the deluge of data tomorrow and Thursday (FOMC, PCE, GDP Megacap ERs). This suggests that there is not a lot of immediate fear in the market (i.e. longer dated vol increase), but there is event hedging, which validates the markets focus on these next two sessions.

©2025 TenTen Capital LLC DBA SpotGamma

All TenTen Capital LLC DBA SpotGamma materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. VIEW FULL RISK DISCLOSURE https://spotgamma.com/model-faq/disclaimer/