2:00 PM Briefing: Positioning for the Close

PART 1: AFTERNOON PIVOT (2:00 PM ET)

PART 2: BOND/YIELD UPDATE

• Auction Results: The 1:00 PM ET 30-Year TIPS auction was solid, with a bid-to-cover ratio of 2.78, indicating decent demand despite broader market jitters.
• Yield Reaction: Yields remain sticky to the upside, with the 10-year holding near 4.10%. Tech (QQQ) remains pressured by the rate environment and AI sector concerns, failing to catch a bid off the auction results.

PART 3: CLOSING SCENARIOS

• Bull Case: Bulls must reclaim 6850 to stabilize the intraday trend and target the Max Pain level of 6875 into the close.
• Bear Case: A break below 6830 opens the door to 6800. In a negative gamma regime, selling can accelerate quickly if this level is breached.
• Gamma Pin Risk: The market is currently trading below the key gamma flip level. Max Pain at 6875 acts as a magnet, but negative gamma dominates below 6830.

PART 4: 1DTE SPX OPTION RECOMMENDATIONS

Trade Idea: Bearish Put Spread for Tomorrow (Feb 20)

• Structure: Long 6825 Put / Short 6800 Put (1DTE)
• Rationale: With the SPX struggling at 6830 and negative gamma exacerbating downside moves, a break of support targets 6800. This spread capitalizes on a potential late-day fade or a gap down tomorrow.
• Risk Management: Stop loss if SPX reclaims 6860. Take profit at 50-60% of max potential gain.

Disclaimer: Trading futures and options involves substantial risk of loss and is not suitable for every investor. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. Prices include the risk of these events.