Intraday volatility surge intensifies market risks

Under the hood change

Intraday volatility has surged, and along with short gamma, it could spark more serious moves as dealers need to adjust deltas dynamically. Most short gamma dealers hedge according to models, but when markets start exhibiting a "sudden" increase in intra day volatilities, those models tend to get overruled by "fear"...often resulting in dealers selling lows and chasing highs.