Institutional
Institutional
Institutional covers the professional side of the options market: how market makers price and hedge the other side of every retail trade, what dealer gamma positioning does (and doesn't do) to the market, how banks package options into structured notes and autocallables, how buffer and covered-call ETFs are built, how the OCC clears and guarantees every listed contract, and episodes like February 2018's volatility blowup. None of it is secret. It is spread across exchange documents, regulator reports, fund prospectuses and academic papers. These pieces pull it together at professional depth, with the sources named.
Start here
How Options Market Makers Hedge: Quoting, Inventory, Delta and Vega Hedging, and Risk Limits
How professional options market makers quote, absorb customer flow, hedge delta and vega, size risk limits, and which exchange obligations and regulatory exemptions shape the business.
Read this first →More in Institutional
Dealer Gamma and Market Impact: Pinning, Intraday Momentum, 0DTE, and the Limits of GEX
How option dealers' hedging can dampen or amplify stock and index moves, what the research on pinning, intraday momentum, and 0DTE gamma actually finds, and why gamma exposure estimates mislead.
Read the explainer →Structured Products and Autocallables: How They Are Built, Priced, Hedged, and Where They Fail
How reverse convertibles, principal-protected notes, and autocallables are built from bonds and options, how issuers hedge them, what FINRA warns, and what the 2024 Korean Hang Seng ELS losses showed.
Read the explainer →Buffer ETFs and Option Income Funds: How Defined-Outcome, Covered-Call, and ELN Funds Are Built
How buffer (defined-outcome) ETFs, covered-call ETFs, and ELN-based income funds build their payoffs from options, as described in their prospectuses, with worked outcome tables and costs.
Read the explainer →Volmageddon: How XIV and SVXY Collapsed on February 5, 2018
How short-volatility ETPs lost about 96% in one evening: the VIX spike, the daily rebalance feedback loop, XIV's acceleration clause, SVXY's -0.5x reset, and what regulators found.
Read the explainer →The OCC and Options Clearing: STANS Margin, the Clearing Fund, and the Default Waterfall
How the Options Clearing Corporation guarantees every listed US option: novation, STANS expected-shortfall margin, the Cover 2 clearing fund, the default waterfall, and CDCC in Canada.
Read the explainer →Executive Hedging and Collars: Zero-Cost Collars, Prepaid Variable Forwards, and the Disclosure Rules
How executives hedge concentrated stock with zero-cost collars and prepaid variable forwards, what Form 4, Item 407(i), and the 2022 Rule 10b5-1 amendments require, and what research finds.
Read the explainer →Tail Risk Hedging Strategies: Put Programs, VIX Calls, the Cost of Protection, and the CalPERS Decision
How institutions hedge market crashes with rolling index puts and VIX calls, what the protection costs, why CalPERS ended its program in 2019, and what the research says about tail hedging.
Read the explainer →Convertible Arbitrage: How Funds Hedge Convertible Bonds, and Why the Trade Broke in 2005 and 2008
How convertible arbitrage works: the bond-plus-call structure, delta hedging, financing and leverage, a worked P&L, and what the 2005 and 2008 episodes show about slow-moving capital.
Read the explainer →Options Order Flow and PFOF: How Retail Option Orders Are Routed, Paid For, and Executed
How payment for order flow works in US options versus stocks: consolidators, exchange auctions and fees, Rule 606 data per contract, the academic evidence, and where SEC rulemaking stands in 2026.
Read the explainer →Variance Swaps and Volatility Desks: Replication, the 1/K² Weighting, Convexity, and the 2008 Lessons
How variance swaps work and how dealers hedge them with a 1/K² strip of options, why variance is convex in volatility, how jumps break replication, and what 2008 did to single-stock variance.
Read the explainer →Inside the 0DTE Market: Who Trades Same-Day Options, How Dealers Hedge, and Whether It Moves the Index
A professional look at 0DTE options: dated Cboe and SEC volume data, who trades them, the gamma arithmetic dealers face, and the research on whether 0DTE trading dampens or amplifies moves.
Read the explainer →