On Thursday, the S&P 500 closed nearly unchanged, despite a strong earnings report from Micron and positive economic indicators, including a GDP growth of 2.1% and PCE inflation at 4.15%. The Nasdaq 100 futures initially surged but fell 3% from their peak before recovering to finish up 0.75%.
This volatility suggests that institutional market-makers may be employing options strategies that profit from price fluctuations, known as 'long gamma.' Brent Kochuba, founder of SpotGamma, noted that dealers are likely stabilizing the market by buying S&P 500 when it dips below 7,200 and selling when it rises above 7,400.
The calm in the bond market, with the long-term Treasury bond ETF TLT moving only three basis points, further reflects this stabilization. The upcoming expiration of monthly options on June 30 could also influence trading behavior as market participants adjust their positions