The Market Behind the Market: How Options Activity Can Influence the Price You See

I have traded options for years. But I did not always fully appreciate how much the options market could influence the underlying market itself. That understanding developed gradually.

People whose market preparation I respected, including Maverick of Wall Street and Trade Brigade, regularly discussed options activity. When I was part of the Bear Bull Traders community, I also remember a presentation by SpotGamma that demonstrated its software and explained options positioning.

The more I heard options discussed as part of market preparation, the more I realized there was a part of the market I didn't fully understand. So I started paying more attention to it.

What I began to realize was that options were not simply another way to trade the market. Activity in the options market could also influence the stocks, indexes, and futures I was already watching.

Good decisions begin with understanding the environment you're operating in. For traders, the options market can be one part of that environment.

Why Should a Stock or Futures Trader Care?

The simple answer is that you do not have to trade something for it to influence the market you do trade.

When you watch a stock, SPY, or ES futures contract, you are not necessarily looking at an isolated market. You may be looking at the visible result of activity taking place across options, futures, exchange-traded funds, and the underlying stocks.

Options create financial exposure for the market makers and dealers on the other side of those trades. To manage that risk, they may buy or sell the underlying stock, a related ETF, futures contract, or basket of stocks. That process is called hedging.

As options positions and prices change, those hedges may also need to change. That can create additional buying or selling in the underlying market.

That buying and selling can become another influence on short-term price behavior.

That does not mean options activity explains every market move. Economic data, earnings, interest rates, positioning, order flow, and ordinary buying and selling still matter. Options positioning is one layer of the market, not a complete explanation.

A trader preparing for the day may benefit from knowing whether options positioning could be:

• Absorbing some buying and selling pressure
• Concentrating activity around specific strikes
• Dampening short-term volatility
• Amplifying an existing move
• Creating areas where market behavior may change

Options positioning is context, not prophecy.

The Basic Mechanics: Delta, Gamma, and Hedging

You do not need to learn every Greek to understand the basic idea.

Delta is a rough measure of directional sensitivity.

Gamma describes how quickly that sensitivity changes as price moves.

Why does that matter?

Changing exposure can require hedging adjustments. A dealer who is reasonably hedged in the morning may need to adjust that hedge later as the underlying price moves.

We don't know exactly how every dealer is positioned. Much of the information traders use is based on models and estimates rather than direct knowledge of every participant's positions.

Under those modeled frameworks:

• In a positive-gamma regime, dealer hedging flows may be more countertrend and can contribute to movement being absorbed.
• In a negative-gamma regime, dealer hedging flows may be more protrend and may contribute to movement accelerating.

That is not a guarantee. It is simply one way to think about the environment.

The useful questions are:

• What does this tell me?
• How does this change the environment?
• What happens if the level fails?
• Is this confirming what price is already telling me?
• How much weight should I give this information?

For many part-time traders, the goal doesn't need to be mastery of every calculation.

Expected Move: A Measure of Magnitude, Not Direction

Expected move is an estimate of how much the market may move over a given period. It can be calculated in different ways, including from options pricing, implied volatility, or volatility measures such as the VIX. Not every trader or platform calculates it in exactly the same way.

What matters most is the function:

• It estimates magnitude, not direction.
• It is not a price target.
• The market is not required to reach it.
• The market is not required to remain inside it.

I use expected-move boundaries as reference points alongside other market evidence.

Put Walls and Call Walls

Put walls and call walls are labels used by different data providers to describe areas where options positioning appears concentrated.

The important catch is that these are not universally standardized measurements. Terminology and calculations vary by provider, so it is important to understand what the tool is actually measuring.

Walls are dynamic levels, not permanent lines on a chart. They can shift as positions change, options expire, price moves, or providers update their models.

A reaction near a put or call wall does not prove that the wall caused it. It may have mattered. It may have contributed. But that is different from proving cause.

My approach is to compare these levels with the rest of my preparation:

• Price structure
• Volume profile
• Support and resistance
• Previous highs and lows
• Market breadth
• The behavior of price when it reaches the level

The SPX, SPY, and ES Connection

The S&P 500 market is an interconnected ecosystem, but the products are not identical.

SPX options, SPY options, ES futures, ES options, and the underlying S&P 500 stocks are different instruments. They trade in related lanes, not in isolation.

They are linked by hedging and arbitrage. CME’s product materials also reflect how futures and options on futures are used as hedging tools within that broader S&P 500 ecosystem.[^2]

For the trader, the practical takeaway is simple:

• SPX, SPY, and ES are different products.
• Activity can be transmitted among them through hedging, arbitrage, and other market mechanisms.
• Looking at only one market can leave out part of the picture.

Why 0DTE Options Matter

0DTE options expire on the same trading day. Because there is so little time remaining, their sensitivities can change quickly, especially as price moves near important strikes.

That matters because the market makers and dealers on the other side of those trades may need to adjust their hedges as the market moves. In simple terms, a relatively small amount of money used to buy an option can create exposure to a much larger movement in the underlying market. If that exposure changes quickly, the hedging needed to manage it can change quickly too.

This is where 0DTE connects with something I have written about before: invisible leverage. The leverage isn't necessarily obvious to someone looking at a stock or index chart, but options can create exposures and hedging needs elsewhere in the system.

And the scale has become significant. Cboe reported that SPX 0DTE options averaged roughly 2.3 million contracts per day in 2025, representing about 59% of total SPX options volume.[^1]

But volume alone doesn't tell us how much those options are moving the market.

Gross volume is not the same as net directional pressure.

Cboe has also published research suggesting that much of the market-maker gamma exposure associated with 0DTE activity can offset, with the resulting hedging representing only a very small share of overall SPX liquidity in its study, around 0.2%.[^3]

That distinction is important. Large 0DTE volume does not mean 0DTE options are responsible for every sudden move or reversal.

What it does mean is that short-dated options have become a large enough part of the market that I believe they are worth understanding. When positioning becomes concentrated or unbalanced, the hedging associated with those positions can become another influence on intraday price behavior.

For me, the takeaway is not that 0DTE controls the market. It is that leverage and risk can exist in places that aren't obvious from looking at price alone.

A Mistake I Made With OLED

I learned the limits of options-derived levels through a mistake with OLED.

I owned the stock and was watching a put wall that I believed would provide additional support. I gave that level more influence than I should have.

When price moved through the support area, I held the position instead of honoring my stop.

That was a trading mistake.

The lesson was not that put walls are useless. The lesson was that an options-derived level is still information, not a guarantee.

The analysis wasn't the problem. The mistake was allowing a single piece of information to take precedence over my risk plan.

Trade the evidence, not the narrative.

Learning more about market structure does not remove the need to honor price and manage risk. Options positioning should add evidence. It should not become a new reason to ignore price, widen a stop, or abandon emotional control.

How Much Does a Part-Time Trader Need to Know?

A trader with a job and limited preparation time does not need to become an expert in dealer gamma.

A practical starting point is understanding that:

• Options positioning can contribute to underlying price behavior.
• Important strikes may influence liquidity and hedging activity.
• Modeled positioning regimes may help explain whether movement is being absorbed or accelerated.
• 0DTE activity is large enough to warrant attention, even if its net impact is debated.
• No options-derived level tells you with certainty what price will do.

My own options preparation adds approximately 15 to 30 minutes to my morning routine. I use tools such as TrendSpider Sidekick and ChatGPT to summarize reports, organize information, perform calculations, compare data, and reduce preparation time. Collecting and interpreting everything manually could take several hours.

I still compare that information against price structure, other market evidence, and my trading process.

Technology can process information faster. It doesn't transfer responsibility for the decision.

The danger is analysis paralysis. If options data causes you to question every trade and abandon a clear process, it may be reducing your decision quality rather than improving it.

I do not want options data to tell me what the market has to do. I want it to help me understand the environment in which I am making the trade.

Disclosure: The TrendSpider link above is an affiliate link. If you choose to purchase through it, I may earn a commission at no additional cost to you. Using my affiliate links helps support Blue-Collar Traders and allows me to continue creating educational content like this.

The Practical Takeaway

Options positioning can provide useful context around:

• Potential intraday ranges
• Areas of concentrated interest
• Whether movement may be absorbed or accelerated
• Potential areas of support and resistance
• Situations where price behavior may change

But it should remain part of a structured process.

If a level matters, ask:

• What does this tell me?
• How does this change the environment?
• What happens if the level fails?
• Is this confirming what price is already telling me?
• How much weight should I give this information?

That is the practical value.

If you want to study these ideas further, Cboe’s Options Institute, its 0DTE resources, and CME’s equity index product education provide a useful foundation. For more on the trading principles I use around preparation, risk, and emotional control, you can also explore The Blue-Collar Trader: Where Hard Work Meets Smart Money.

Understanding creates options.

[^1]: Cboe Global Markets, “Cboe Global Markets Reports Trading Volume for December and Full Year 2025” and Cboe, “The State of the Options Industry: 2025”.
[^2]: CME Group, “E-mini S&P 500 Futures Overview” and related equity index options education materials.
[^3]: Cboe, “0DTEs Decoded: Positioning, Trends, and Market Impact”.

Frequently Asked Questions

Can options activity influence stock prices?

Yes, options positions can create hedging activity in the underlying stock, ETF, futures contract, or a related basket. However, options activity is only one possible influence and does not explain every price movement.

What is dealer gamma?

In practical terms, gamma describes how quickly directional exposure can change as the underlying price moves. Traders often use modeled dealer-positioning estimates to infer whether hedging flows may be more countertrend or protrend, but those are estimates, not direct visibility into every dealer’s actual book.

What is a 0DTE option?

A 0DTE option is an option with zero days remaining until expiration. Its sensitivity can change rapidly, especially when the underlying approaches the option’s strike price.

What is an expected move?

An expected move is an estimate of how much price movement may occur over a specific period. It can be calculated using options pricing, implied volatility, or volatility measures such as the VIX. Depending on the method, it is often expressed as an approximate range, but it is not a directional forecast, price target, or guaranteed trading range.

Are put walls and call walls guaranteed support or resistance?

No. They are reference points based on open interest, modeled positioning, or other provider-specific measures. The terminology and calculations can vary by tool, and the levels can shift, fail, or become less relevant as conditions change.

Does SPX options activity directly move ES futures?

Not necessarily. SPX, SPY, ES, and the underlying S&P 500 stocks exist in an interconnected ecosystem linked by hedging and arbitrage. Flows in one product can influence others, but the relationship is not a simple one-way cause-and-effect process.

Does a trader need to trade options to benefit from understanding them?

No. A trader who focuses on stocks, SPY, or ES may still benefit from understanding how options positioning can affect liquidity, volatility, and short-term market behavior.

About the Author

Bill Fister is the author of The Blue-Collar Trader: Where Hard Work Meets Smart Money and The American Dream Derailed: How Debt & Deception Shape Our Lives and How We Reclaim Control. Drawing on decades of experience in the trades, business ownership, leadership, and the financial markets, he helps working-class people better understand money, risk, systems, and opportunities so they can build greater clarity, stability, and independence.