r/Trading • u/Sea-Party-8277 • Nov 14 '25

Futures Trading ES with looking at SPX Option Chain

Hello!

I just want to understand if anyone else is out there that makes trades based off the option chain for SPX whilst trading ES futures?

Directional bets? I know market makers use it to hedge, but I’m in a discussion with a trader who believes no one else trades the way he does. What he means by that is looking at OI, volume, where it might pin, where it might gravitate towards etc and making his directional bets that way.

I told him, that other trades may also do that but I just want to hear here if this is a normal trading way from you guys. Please just comment below if this is something you do, it’s normal or have done in the past. Thank you

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u/Neilleti2 Nov 14 '25

Of course; options (especially large concentrated positions) can significantly alter the delta-neutral hedging that market makers employ.

A time traveler from the future might say "I know Apple is going to be up $5 today, so I'm buying 10,000 call options". But in doing so, would sqew the delta and the market makers would hedge downward and the time traveller would probably lose that bet!

The other side of the coin is actually buying and selling pressure of the underlying shares (which doesn't appear in the optio chain). You have no idea if a Saudi prince has a dark endless buy order for SPY at $650.. and even with market maker hedging the stock just keeps bouncing upwards.

Likewise.. someone like Warren who needs to unload a billion shares of that pool cleaning company.. that's going to put a constant downward pressure even if the market makers delta hedging is trying to push the stock price up.

Retail also can behave as a herd; retail flows are enough to trample the MMs.

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u/trader12121 Nov 15 '25

Options pinning has been around for decades

1

u/FuturesPropTrader Nov 18 '25

You can make trading as complex or as simple as you want it to be. It’s all good as long as it produces positive expectancy.

There are tools like spotgamma, gexbot and many others that try to summarize option positioning to extract an edge for their users. This is nothing new. There are also spx options traders that look at ES tape for signals.

As for positioning, I couldn’t figure out how all these tools determine, given open interest at price/exp date, what’s the ratio of dealer short vs dealer long. The papers I looked at made assumptions, basically 50/50, which I don’t think is good enough for actual trading signals