Lots More With Charlie McElligott on the Sharp, Strange Selloff
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What is the main topic discussed in this episode?
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Bloomberg Audio Studios Podcasts, Radio, News. It's good.
It's good. You know, markets are fun and Well, and as we said, spring's here.
Yeah, markets finally got interesting.
Oh man. I I mean I have so many thoughts. Oh good. All right. If you can't tell from my normal stream of consciousness operation.
You know how I know it was bad, Joe?
Go on.
It was one of those weeks where we talked about negative g gamma quite a lot. What's interesting? Interestingly, we didn't talk that much about standard deviations, which is kind of funny. Normally those two kind of go hand in hand, but not last week. It was weird.
What's gamma again? I feel so dumb because I know we've talked about gamma and it's just one of those things. It's like, what is it again?
Should we get you a refresher?
Yeah, I need one of those guide to the Greeks books or something. Or like a little like laminated card that I can like
someone should do a coffee table book.
Yeah.
Yeah.
Guide to the Greeks. And I like Greek stuff these days, you know, 'cause I'm into like ancient history and everything like that. I know what alpha is, I know what beta is. After that I started getting a little dicey. I did a deadlift.
I'm both the most popular trader and most successful trader at Citadel.
Feta's going viral.
Uh barges.
This is an after school special, except
I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US. Black gold! These are the the important questions. Is it robots taking over the world? No, I No,
I think that like in a couple years the AI will do a really good job of making the Outlaws podcast. One day that person will have the mandate of heaven.
How do I get more popular and successful?
We do have the perfect gift.
You're listening to Lots More, where we catch up with friends about what's going on right now.
Because even when the odd lots is over, there's always lots more.
And we really do have the perfect guest. Oh, the definition. I feel like I've done this before. Um, but gamma, gamma is the option sensitivity to the change in delta, and delta is the option sensitivity to the underlying price. So gamma is like the change of the change. It's a function of the underlying price, but it's second order. And I guess negative gamma. That's when Delta is in the opposite direction to the stock price movement. So Delta goes down if the underlying asset price is going up. And then it becomes less negative if the underlying asset price is falling.
Why did the S&P 500 sell off sharply without a big spike in volatility?
And we usually see people talk about this during market sell-offs because all the options traders have to basically sell or buy stuff to hedge all that changing. Exposure. And the suspicion is always that that hedging activity are pushing the market in one way or the other. I think that's it. Okay, I did it. Um Charlie, you should write a book, a coffee table book on the Greek letters.
I'm I'm liking this like Spartans versus Romans history vibe where we're going. Yeah.
That's very you. I feel that's very comfortable. Yeah, if you're comfortable. It res it resonates. It resonates. Yeah, I know.
It resonates.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–3:42
2
Why did the S&P 500 sell off sharply without a big spike in volatility?
3:42–5:14
3
What is negative gamma and why did it matter during the recent market crash?
5:14–25:37
4
Which S&P 500 price levels acted as acceleration points for the sell‑off?
25:37–28:13
Speakers
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