Reading Earnings Hedging in the Matrix
An earnings chart frequently looks evenly hedged and unreadable on gamma exposure alone, while the vanna exposure view exposes where the genuine level sits.
Why do earnings charts look evenly hedged?
Ahead of an earnings release, participants buy protection in both directions, which distributes open interest across upside and downside strikes. The gamma exposure view therefore shows large bets on both sides and offers no obvious directional read on the chart.
What does the vanna view reveal at earnings?
Switching to the vanna exposure view often exposes a single heavy concentration that the gamma view hid entirely, marking the genuine floor or ceiling. A strike carrying a dominant vanna value while everything around that strike stays thin is the level that matters.
What should a trader look for in earnings positioning?
The Obsidian desk looks for stacking, meaning the same strike showing heavy concentration across several expirations rather than on one single date. Stacking across multiple expirations indicates durable structure rather than a short lived hedge placed purely for the earnings event itself.