What if 0DTE options trigger a 7% intraday market swing?
A Friday 0DTE gamma cascade producing a 7% intraday swing is dealer-hedging mechanics, not a fundamental break — the move is violent into the close and largely retraces, so the trade is fading the extreme and harvesting the vol crush. The Aug-5-2024 VIX spike to ~65 intraday (yen-carry unwind amplified by short-gamma) is the analogue: a record intraday dislocation that round-tripped within days. Forward angle: record 0DTE volumes mean these air-pockets recur and self-heal; sell the panic, do not chase the gap.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A Friday afternoon 0DTE options cascade triggers a 7% intraday S&P swing as dealers hedge violently into the close. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.