Dealer Edge Vol Scenario
Implied volatility moves the hedges dealers need, not just the price of options. The Vol scenario card answers one question: if implied vol moved by this much, where would dealers likely buy or sell to stay hedged?
You find it in Dealer Edge Focus mode on the web app.
How to use it#
- Pick the move - slide implied volatility up or down, up to 15 vol points either way. The card suggests a starting move when an event is coming up.
- Pick the expirations - the front expiry, all expiries, or the expiry that holds the next event (earnings or a scheduled macro release such as CPI or an FOMC decision).
- Read the chart - each strike shows whether dealers would likely buy or sell to stay hedged, and the card highlights the strike with the most pressure.
Reading it well#
- Vol crush after an event. Before earnings or a macro release, implied vol is often elevated. Sliding it down shows where the hedge flows would come from once the event passes.
- Pair it with the heatmap. Pressure that lines up with the Anchor, the Flip or a Defense Line matters more than pressure at an empty strike.
- It is an estimate, not a forecast. The card re-prices today's option chain assuming every contract's implied vol moves by the same amount. Real vol moves are uneven, and the chain changes through the day.