Brent Kochuba of SpotGamma examines what could disrupt the stock market’s calm as rising rates and fading AI enthusiasm meet October options expiration. Put selling still supports equities, but a shift toward downside protection could change that picture.

On this episode of The OPEX Effect, Brent Kochuba and Jack Forehand explain how dealer hedging, gamma and short-dated options influence the stocks investors own. They review what changed since September, why index volatility can stay low while risks build underneath, and the positioning signals Brent wants to see before making a stronger bearish call. The discussion closes with his conditional upside and downside scenarios for the S&P 500.

Topics covered:

• Why weakening AI leadership matters when the broader market lacks participation
• How call buying creates dealer hedging flows and potential gamma squeezes
• Why options expiration can change market direction and volatility
• The growth of 0DTE trading and its possible effects on market behavior
• Why October’s expiration looks relatively typical despite the macro uncertainty
• Passive inflows, buying the dip and the changing risks inside the S&P 500
• What net put selling reveals about sentiment and ongoing market support
• Falling tech call skew and the debate over AI revenue expectations and subscription economics
• Why the speed of rising yields matters and falling oil has not brought rates down
• Brent Kochuba’s 7,700 S&P risk pivot and the conditions behind his bullish and bearish scenarios

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Chapters:

00:00 Rising rates, AI leadership and equity calm
07:23 Options volume, dealer hedging and gamma squeezes
13:07 Gamma, expiration and changing market behavior
18:17 Who trades 0DTE and what it means for volatility
22:21 October expiration and the market’s quiet positioning
26:50 Passive investing and changing index risk
31:14 Reviewing September’s signals and outcomes
37:30 Low realized volatility and SpotGamma’s flow signals
43:28 Correlation, upside risk and AI economics
49:31 AI expectations, positioning and bond-market signals
55:31 The 7,700 risk pivot and scenarios into year-end

Learn more about the Excess Returns podcast network.

No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

SpotGamma founder Brent Kochuba joins Jack Forehand to break down September options expiration, the S&P 500's negative gamma risk, and what options positioning reveals about potential stock market volatility. They explore how rising oil prices, higher Treasury yields, and shifting AI sentiment could interact with a major expiration to change the market's direction.

Brent explains why he measures this expiration at roughly $2 trillion rather than the $9 trillion making headlines, why he is watching the S&P 500's 7,600 level, and how falling technology stock volatility changes the opportunity set for options.

Brent Kochuba on Twitter
https://x.com/brentkochuba

SpotGamma
https://spotgamma.com

Topics covered:

• How growing options volume and market maker hedging influence underlying stock prices.

• Why options expiration can change market trends and volatility as existing hedges unwind.

• The difference between headline options notional and SpotGamma's roughly $2 trillion delta-adjusted expiration estimate.

• What August's technology reset and Jackson Hole reaction reveal about investor positioning.

• How cheaper AI models, falling token prices, and public backlash complicate the technology investment story.

• Why declining semiconductor volatility and changing dispersion point to a potential market inflection.

• How negative gamma below S&P 7,600 could amplify selling, with 7,350 emerging as another level to watch.

• Why positive gamma in individual stocks could offset some of the index market's instability.

• How rising oil prices, Treasury yields, and stock correlations could challenge AI optimism and traditional stock-bond diversification.

• What CPI, the Fed meeting, VIX expiration, and midterm elections mean for hedging demand and options pricing.

Timestamps:
00:00 Why Brent sees downside risk near market highs
05:19 Bessent's "I'm the house" comment meets rising yields
10:38 Options exchange growth and the bear market question
15:29 Why OPEX changes market behavior and how to measure its size
20:40 What August's tech reset and Jackson Hole revealed
24:43 Can AI earnings overcome rising macro risks?
30:14 The tech wedge, falling semiconductor volatility, and gamma risk
35:20 How expiration could reduce negative gamma exposure
39:21 Oil, Treasury yields, and stock correlations move together
44:22 Why the reason interest rates rise matters for stocks
49:48 Election hedges, Fed uncertainty, and returning put demand
54:43 S&P 7,600 and positioning for volatility in either direction

Learn more about the Excess Returns podcast network:

https://excessreturns.co

No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

In this episode of The OPEX Effect, Jack Forehand and SpotGamma founder Brent Kochuba break down how options expiration, 0DTE trading, dealer gamma and leveraged flows are shaping the stock market. They examine the shift from AI-driven speculation toward interest rates, the July tech volatility reset, and why Nvidia earnings and Jackson Hole could determine the market's next major move.

Brent Kochuba and SpotGamma on X
https://x.com/spotgamma

SpotGamma
https://spotgamma.com/

Topics covered

• Why the options market is shifting its focus from AI and token growth toward interest rates and macro data

• How record options volume creates hidden stock and futures flows through dealer hedging

• Why stock market trends and volatility frequently change around options expiration

• How 0DTE options have transformed SPX and Nasdaq trading and increased short-term mean reversion

• What the roughly $1 trillion August options expiration says about current investor positioning

• How July's leverage unwind contributed to sharp declines in Nasdaq, semiconductors and memory stocks

• Why leveraged ETFs, margin calls and options positioning can amplify moves that investors attribute to fundamentals

• What falling tech implied volatility and record-low put-call ratios say about AI speculation and investor risk appetite

• How the VIX term structure and the collapse in stock dispersion point to a broader, more stable market

• Why Nvidia earnings, Jackson Hole, bond positioning and dealer gamma could create a major move in either direction

Timestamps

00:00 Why the market is shifting from AI to interest rates
05:12 Record options volume and how dealer hedging moves stocks
11:10 Why market trends often flip around options expiration
15:51 How large is the August options expiration?
20:12 What July's tech volatility spasm taught us about positioning
28:03 Why tech implied volatility is falling as AI speculation cools
33:21 The VIX crush and what the volatility curve is pricing
38:25 How July OPEX helped trigger the great dispersion unwind
44:21 Nvidia, Jackson Hole and the volatility event markets are pricing
50:00 Gamma levels, downside risk and the market's key guardrails

Learn more about the Excess Returns podcast network:
https://excessreturns.co

No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.