How the Options Market Can Drive Trading and Prices In Major Stock Index Futures

By NinjaTrader


One of the key elements that drives major market index futures prices is trading and hedging in the index options markets. As large traders and market makers place new speculative positions or hedge against existing positions using the options markets, they can often move futures prices in real-time. Traders need specialized tools to better track these large trades and positions in order to make better trading decisions.

How Major Stock Index Options Markets Drive the Futures Market

In this edition of ‘Traders Workshop’, we discuss how the major stock index options markets can drive short term movements in the futures market.  We also touch on how tracking Call & Put Gamma can help imply the size of Call and Put open interest, in order to better gauge bullish or bearish sentiment.  And finally, you will learn how to spot key price levels where large options positions are sitting, and therefore might be hedged and must be unwound by their expiration date.

Additional topics covered in the livestream include:

  • How institutional market participants can affect prices in the futures market.
  • How Call and Put Gamma can help gauge directional sentiment.
  • Using Call and Put volume and open interest to spot key price levels.
  • Why options implied volatility can help traders anticipate market action.
  • How CPI can affect the overall options markets and then the futures markets.

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Be sure to join us live each Tuesday at 12:00pm ET for another edition of Traders Workshop. You can watch previous Trader's Workshop events available on-demand:

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