Stochastic Volatility - Options market insights

Stochastic Volatility - Options market insights

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Stochastic Volatility - Options market insights
Stochastic Volatility - Options market insights
We aren't out of the wood, Intraday post (07/April)
Market analysis

We aren't out of the wood, Intraday post (07/April)

Apr 07, 2025
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Stochastic Volatility - Options market insights
Stochastic Volatility - Options market insights
We aren't out of the wood, Intraday post (07/April)
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My weekly post and last weekly post are crucial.
Basically those three posts I linked at the beginning.

China is about to launch its retaliation in response to the US tariffs, along with Japan. As I mentioned a week ago, if they start selling US Treasuries, it would be catastrophic for the US market. However, even in the midst of the biggest chaos, let’s not forget—something I can’t stress enough—that all this is measured out beforehand. Not entirely, of course, but Trump knows exactly what he’s doing. He and his insider partners have every tool at their disposal to rescue the economy from a recession and prevent a deflationary spiral. But deflation fears need to be priced into the market. Stagflation must disappear from the data completely, so that the next QE into Q3 doesn’t trigger another inflation cycle.
The UK hasn’t made a decision yet. The EU so far hasn’t retaliated significantly, but it’s signaling that it’s willing to restructure itself from globalist capitalism into a more flexible stance.
As I said, any long delta position I take is also short vega, vanna, and vomma, and long theta and charm. And I’m being extremely cautious. As I wrote, the market has only just entered the woods.
Any bounce—or rather grind up—will be used to build a lifeboat. Red flags are gathering in the market.

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