We approach the stock market from a data based methodology. Below is a basic understanding/how-to of what our methods are.
Delta Hedging
Delta hedging is a strategy within the stock market that is used by market makers and dealers. The goal is to “balance” or “0 out” options trades so that they have no impact on market maker’s books. In other words, they're trying to eliminate the risk they take on from either having to buy or sell options to their customers. Spyglass visualizes the live delta impact of option trades so traders can possibly know what to expect for future intraday movement. It's like watching large option trades comes in on flow sites, but instead of in a numerical format - which usually leaves the trader to analyze the option on their own (which can be time consuming) - we plot the impact as it happens instantly. And in a game where speed is everything, those extra couple of minutes saved can make a huge difference. Plus, with our SPX customer data feature, you will be able to know EXACTLY how MM's are positioned on the S&P500 index!
Live Delta/Gamma levels
Gamma and Delta in the stock market are largely impactful phenomenon's. Gamma for us is seen as an either volatile or non volatile "trading environment" with these “magnet” levels that will act as Support, Resistance, or a Pin. It can be very useful for identifying those "major" turning points. Delta on the other hand, our favorite tool to use, helps us go a little further on a day-to-day basis by determining the “vibe” of the market. Whether the market is likely going to be bullish or bearish! Using the options market, SpyGlass provides traders with these levels daily for high-probability trades based on directional ideas.
Visual Premium for All Option Trades
Ever struggled with timing the market? We've discovered unusual patterns in the timing and location of options trades relative to the underlying assets they represent. When large and consistent option trades take place, the market tends to either pivot or continue aggressively in the current direction, especially when looking at short-term options. The visualizations SpyGlass offers on this enables traders to perfect their timing on entries AND exits.
Darkpool and live SPX data!
Darkpools are private financial forums or exchanges where trading of securities takes place away from the traditional public markets. Were sure you've likely heard of them before. This setup is especially useful for large trades by institutional investors, as it helps reduce market impact and maintain discretion. Monitoring Darkpool and Lit exchange volume can be crucial for traders looking to gauge hidden market sentiment and make informed decisions based on movements not visible on standard exchanges. The Volume tool, featured on SpyGlassEdge.com, offers a powerful platform for traders to see live darkpool trades real time! We also offer a separate tier that grants access to true directional option trades. In other words, you will be able to know 100% whether an option was purchased or actually sold specifically for the SPX index!!
About our Tools
This guide will walk you through our powerful options analysis tools. We'll show you how to interpret the charts and data to gain a unique edge in the market. Let's get started!
EXAMPLE #1
Lets Start here with Example #1. This is the standard view that we offer which is primarily made up of Naive options data.
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At the very top of your screen, you can select any ticker you wish to analyze. Right next to it, you'll find a dropdown for the options expiration date. For understanding daily market dynamics, we highly recommend focusing on the 0DTE (Zero Days to Expiration) contracts.
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This view provides a powerful, at-a-glance look at key options metrics for most tickers. It uses "naive" data, which assumes calls are bought and puts are sold, giving a solid general read on the market.
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Main Chart: Gamma & Delta Levels
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The main price chart is overlaid with crucial horizontal lines representing Gamma and Delta levels.
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Gamma (Left Side): Think of gamma as a measure of market stability.
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🟢 Positive Gamma (Green Bars): These levels act like magnets for the price, often leading to slower, range-bound "pinning" action.
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🔴 Negative Gamma (Red Bars): These levels act like repellents. When the price approaches these zones, expect higher volatility and the potential for sharp, explosive moves away from them.
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Delta (Right Side): This shows you where Market Makers (MMs) are likely to hedge their positions by buying or selling the underlying asset.
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🟢 Green Bars: Potential buy zones.
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🔴 Red Bars: Potential short zones.
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Pro Tip: Pay close attention to the largest bars, as they represent the most significant hedging pressure!
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Sub-Charts: Premium & Impact
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Below the main chart, you'll find two key data streams:
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Options Premium ($): This chart tracks the dollar value of options being traded every minute. Green bars are calls, and red bars are puts.
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How to use it: Watch for massive "premium spikes"! A large spike in call or put premium can often signal a point of exhaustion and a potential market reversal. 🎯
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Delta Impact: This chart shows the cumulative options flow throughout the day.
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Green Line: Call delta
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Red Line: Put delta
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Grey Line: Net (Total) delta
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Interpretation: When the lines are trending up, it signifies bullish flow (call buying, put selling). When they are trending down, it signifies bearish flow (put buying, call selling).
EXAMPLE #2
Moving on here to Example #2 now.
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This is where the real magic happens! ✨ For $SPX, we use 100% verified customer positioning data. This isn't a guess; it's an accurate map of how MMs are positioned and how they are likely to hedge.
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The Advanced View: $SPX (Real Customer Positioning)
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The Dir Gamma (Directional Gamma) View
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This is your most detailed view, breaking down positions by color so you know exactly what type of options are at each strike.
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Understanding the Colors: The colors tell you both the instrument type (Call or Put) and the customer's position (Long or Short), which dictates the delta. THE COLORS BELOW REPRESENT THE DELTA (RIGHT SIDE)
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🟢 Green = Long Calls: Customers are buying calls, creating positive delta.
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🔵 Blue = Short Calls: Customers are selling calls, creating negative delta.
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🔴 Red = Short Puts: Customers are selling puts, creating positive delta.
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🟣 Purple = Long Puts: Customers are buying puts, creating negative delta.
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Reading the Chart for Gamma and Delta:
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Left Side (Gamma): This is your volatility guide. WE plot the Gamma based on the MM exposure. Levels with high positive gamma (a mix of short calls/puts, 🟢 and 🔴) act like magnets, pinning the price. Levels with high negative gamma (a mix of long calls/puts, 🔵 and 🟣) act like repellents, causing price to accelerate away and through.
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Right Side (Delta): This is your hedging map. It shows you the delta exposure that MMs have to hedge against. The most powerful signals for sharp price moves come from strikes with large amounts of long In-The-Money (ITM) options (deep green or deep purple bars).
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The Net Gamma / Net Delta View
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Think of this as the "big picture" or "summary" view. It combines all the positions from the Dir Gamma chart into two simple colors, making it easy to spot the most dominant levels.
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🟡 Yellow Bars: Represent Net Positive levels. For gamma, these are the major "pin" zones that will attract price.
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🟣 Purple Bars: Represent Net Negative levels. For gamma, these are the major "volatility" zones that will repel price.
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This view is incredibly insightful for quickly identifying the overall gamma environment and the key price levels to watch.
EXAMPLE #3
Lets lastly touch into Example #3 now.
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The Final Piece: $SPX Net Charm 🧩
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Charm is the "secret weapon" for understanding passive market drifts, especially as expiration approaches. This chart shows the customer's charm position. To figure out what the MMs will do, you simply take the opposite.
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In short, charm shows how an option's delta changes as time passes. This creates passive buying or selling pressure from MMs who must constantly adjust their hedges.
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How to Read the MM Hedge Flow:
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🟡 Yellow Bars (Customer Positive Charm): This means MMs are negatively exposed to charm. They will be passively BUYING futures at these levels, creating a tailwind for the market.
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🟣 Purple Bars (Customer Negative Charm): This means MMs are positively exposed to charm. They will be passively SELLING futures at these levels, creating a headwind for the market.
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Pro Tip: Think of the yellow levels as potential support zones and the purple levels as potential resistance zones created by this passive flow. You can ignore the Theta levels on the left; the real alpha is in the Charm!
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OI / CP (Open Interest / Customer Position)
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This is a straightforward view that shows how many traders are long or short options at each specific strike, giving you a clear picture of where the biggest positions are held. This is the last dropdown that we have, and it's fairly straightforward!
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