There’s a statistic you’ve probably heard that makes retail traders feel doomed from the start: 80-90% of all options expire worthless.
That isn’t bad luck or randomness. It’s the inevitable outcome of a market where pricing, spreads and expiration dynamics are engineered by the market makers who control the table.
When they set the odds, most contracts are designed to decay into nothing.
They’re the dominant force on roughly 75-80% of trading days. And while another institution might step in with size occasionally, especially in individual names, the market makers shape the landscape the vast majority of the time. Their activity dictates where value flows and where it disappears.
Here’s the part almost nobody talks about: Market makers don’t just trade the market — they tune the market. One of the most powerful levers they control is implied volatility, the sigma that drives option pricing.
Sigma isn’t some mystical reading that drifts on its own. It’s deliberately dialed down when markets are quiet and cranked higher when big moves are expected.
When a stock has been flat for weeks, sigma gets pressed down. When earnings are near or catalysts are brewing, they’ll turn that knob up so high it’s practically buzzing.
If you can spot those sigma changes early — before they’re obvious — you can read their expectations. Those sudden surges act like the market maker’s fingerprint, a forward-looking tell that a meaningful move may be coming.
When sigma ramps subtly, options are still affordable. When it spikes, the move is already priced in and the contracts become wildly overpriced. That’s why waiting for the big jump is a mistake. The edge comes from anticipation, not reaction.
Two Distinct Ways to Read Market Maker Activity
When I analyze market maker behavior, I look at it from two angles. The first is the mechanical side — what they’re forced to do. Hedging obligations, delta balancing, gamma exposure. These mechanical pressures create predictable movements driven by math, not opinion.
The second angle is where the real gold lives: What they’re projecting for the future. This is where systems like Maverick come in. By analyzing how they adjust volatility and pricing structures, you can reverse-engineer their expectations.
Instead of trying to outthink the giants, you move with them. This is also where market maker math stands miles ahead of traditional technical indicators. Most tools simply tell you what already happened. Market maker volatility adjustments tell you what they expect to happen next.
Why Fighting Market Makers Is a Losing Game
Most traders unknowingly fight the very force that sets the rules. Market makers control spreads, pricing models and risk parameters that determine whether an option has any real chance of ending in the money.
That’s why so many contracts expire worthless — the house designs the odds. But their own activity moves markets, so the smarter path is to reverse-engineer their positioning and follow their footprints instead of stepping into their trap.
What’s changed is access. A few years ago, catching these subtle sigma shifts required institutional infrastructure. Unless someone had massive data pipelines and high-end computing resources, it was impossible.
But with advances in AI and huge improvements in data availability over the last year, the gap has closed. The signals that used to be hidden behind walls of capital and hardware are finally visible to regular traders.
If you’re trading options without understanding how market makers manipulate volatility, set probabilities and telegraph expectations, you’re playing a game where the house already knows the ending. The edge isn’t in looking for more setups — it’s in understanding the force that controls the outcome.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Miss Today’s Stock Stock Roundtable? It’s not too Late!
This morning’s Summer Stock Roundtable turned into one of our most useful sessions yet…
We walked through the exact roadmap we’re using for the months ahead, including the Summer Stock Calendar I promised attendees.
Since many of you couldn’t make the live event, we’ve decided to open up one more session at 4 p.m. ET.
If you join us, you’ll receive the full digital calendar at no cost.
That includes:
- 10 market dates were watching closely this summer
- 10 stocks historically tied to those periods
- Over a decade of supporting market data
- Additional trade setups we believe could stay active into late summer
This isn’t about random stock picks.
It’s about identifying periods where history, seasonality, and momentum tend to align.
No guarantees in trading, of course.
But if you want the same summer roadmap we’re using ourselves, make sure you’re in the room at 4 o’clock.
