Options Tension Sparks Another Rotation Wave

What Happened

• Gamma positioning into expiry kept volatility sticky; intraday ranges widened as dealers chased deltas.
• The dollar rallied on rate-spread support, knocking gold and EM FX while lifting financials.
• Energy caught another bid as supply worries lingered; flows shifted further into value and defense.

What It Means

• Options mechanics, not macro, drove today’s chop—but they reinforced the existing move out of duration-heavy growth.
• A firmer dollar tightens conditions at the margin yet hasn’t broken credit or liquidity—stress is elevated but contained.
• The persistent energy bid shows investors still want real assets as hedge and yield, regardless of FX noise.

What I Think

• The market is using options-induced volatility to keep rotating exposures rather than to add net risk.
• If the dollar rally persists, commodities may pause, but flows into cash generators shouldn’t reverse.
• I’m respecting the volatility while keeping the same posture: real assets over speculative growth.

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Market Terms

• Gamma — The rate of change of an option’s delta; high gamma can force dealer hedging swings.
• Delta Chasing — Adjusting hedges rapidly as prices move to stay neutral.
• Duration-Heavy Growth — Names whose value depends on distant cash flows and suffer when rates rise.