Notes · Aug 21, 2026

SPX and Nasdaq set for first weekly loss since late July

Educational only. Not investment advice. Not a trade recommendation.

How a Weekly Loss in the S&P 500 and Nasdaq Impacts 0DTE Options Structure

A weekly loss in the S&P 500 and Nasdaq can significantly impact the 0DTE options structure, particularly when it comes to dealer gamma and expected move. When the indices are set to post a weekly loss, dealers tend to adjust their hedging strategies, which in turn affects the options market. If the SPY is pinned just under a call wall, for instance, a weekly loss could lead to a decrease in call buying and an increase in put buying, as dealers look to hedge their positions.

This shift in dealer sentiment can result in a change in the expected move, making it more challenging for traders to predict the market's direction. Furthermore, the vol regime may also be impacted, as a weekly loss can lead to an increase in volatility, causing dealers to widen their hedging ranges. To better understand how these mechanics work, it's essential to delve into the concepts of dealer gamma and expected move, and how they influence the options market.

Dealer Gamma and Expected Move

Dealer gamma plays a crucial role in shaping the 0DTE options structure, particularly during times of market stress or significant price movements. When dealers are short gamma, they tend to hedge by buying options, which can lead to an increase in the expected move. Conversely, when dealers are long gamma, they tend to hedge by selling options, resulting in a decrease in the expected move. Understanding how dealer gamma works is essential for traders looking to navigate the 0DTE options market.

In the context of a weekly loss in the S&P 500 and Nasdaq, dealers may adjust their gamma exposure by buying or selling options, which can impact the expected move. If the expected move increases, traders may need to adjust their positioning to account for the potential increase in volatility.

Vol Regime and Session Behavior

The vol regime is another critical factor to consider when trading 0DTE options, especially during times of market uncertainty. A weekly loss in the S&P 500 and Nasdaq can lead to an increase in volatility, causing dealers to widen their hedging ranges. This, in turn, can result in a more volatile trading session, making it challenging for traders to predict the market's direction.

Traders need to be aware of the vol regime and how it may impact their trades. If the vol regime is high, traders may need to adjust their positioning to account for the potential increase in volatility. Additionally, understanding the session behavior, including the opening range and the flow of orders, can help traders make more informed decisions.

Practical Takeaways

In conclusion, a weekly loss in the S&P 500 and Nasdaq can significantly impact the 0DTE options structure, particularly when it comes to dealer gamma and expected move. Traders need to be aware of these dynamics and adjust their positioning accordingly. By understanding how dealer gamma and the vol regime work, traders can make more informed decisions and navigate the 0DTE options market with confidence.

As you consider your next trade, take a closer look at the current market conditions and how they may impact the 0DTE options structure – and consider exploring the Confluence Decision Desk to gain a deeper understanding of the market dynamics at play.

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Educational content only. Options involve substantial risk.