We will have to quantify it, and i am lazy to do that for no reason. But i doubt this, atleast in index futures. Its not too much out of ordinary.
And anyway, markets do things like this from time to time – stuff that hasn’t happened earlier. Crude went negative !
I don’t trade options, but on expiry days, someone just selling far otm options without a hedge is probably asking to get hit like this eventually. 2 to 100 is probably not a big deal on expiry day, i guess perhaps coming back to 5 is not?
And the assumption that they are causing spike is completely out of his dream. Anything is possible, but then we can assume anything. Just FUD.
Just a handful of them were sharp imo. Anyway, expiry days always have had sharp moves sometimes in past, i dunno what you expect.
Markets move to test liquidity, perhaps if huge number of people are doing the same thing and keeping stops in similar areas, they are gonna get hit ?
Maybe maybe not, but volatility spikes tend to cluster, so get used it, more may happen.
His suggestion that all option buyers/sellers are struggling is also likely not true. There are some big option traders here that seem to be doing alright. And few months of tough market is perfectly normal. People expect too much. I am used to have dd of more than 6 months in trend following systems.
And that small fish / medium fish / big fish is a load of baloney that really has no relevance for traders. Just good for story telling. Lots of players combine to form a market and a single player has limited chance of impact on liquid markets. Any large spike is likely going to hurt the seller is my guess. Even more, all market orders need limits these days ( 1% for futures) so 1 order can only move index by max 1 percent and that should bring arbitrage algos quickly to take advantage.
Anyway, whatever may be happening, we need to adapt.
Trading gives challenges form time to time whatever your system. Most people wont be able to handle it either due to uncertainty intolerance or by taking too much risk. In my case, the crazy buy the dips was causing issue for shorts for some systems so i had to adapt. Similarly, an option trader needs to adapt to whatever may be causing problems.
