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I want to pull back the curtain on something I’ve been using to identify high-probability trade setups — a proprietary system that tracks institutional liquidity levels across the options market.
This system has been honed over years of analyzing market data and understanding the intricate dance between institutional investors and market makers.
Here’s the core concept: When massive institutional option positions cluster at specific strike prices, they create what I call “liquidity levels” — price magnets where market makers are forced by regulation to accumulate shares.
And when I say forced, I mean it literally becomes a self-fulfilling price movement. This phenomenon is not just theoretical — it’s backed by the consistent patterns observed in market behavior.
Let me walk you through exactly how this works and why it matters for your trading.
How the System Identifies Institutional Price Targets
The software I use aggregates data from 40+ different option chains across various investor sizes, but I focus primarily on the institutional side to see where the really big money is positioned. This focus allows us to capture the movements that truly drive market trends, often unseen by retail traders.
What I’m looking for are massive option positions paying premiums above current prices at specific strike prices. These become my liquidity levels — the exact targets where price has a strong statistical tendency to gravitate toward.
In fact, studies have shown that such liquidity levels can predict price movements with a high degree of accuracy, often leading to significant market shifts.
Here’s the mechanism that makes this work: When large institutional players buy call options at a specific strike price, market makers who sold those calls must accumulate shares as price approaches that strike to remain delta-neutral per SEC requirements.
This requirement is crucial because it ensures that market makers maintain a balanced risk profile, which in turn influences their trading behavior.
For large positions, this can mean hundreds of thousands or even millions of dollars in forced share purchases. That buying pressure of course drives price higher in a self-fulfilling prophecy. It’s a cycle that repeats itself, creating opportunities for those who know where to look.
The real edge comes from tracking these levels in real-time for 0DTE (zero days till expiration) to seven-day expirations, which allows me to front-run the forced hedging activity before it accelerates.
This timing is critical, as the window for capturing these moves can be narrow but highly profitable.
A Real-World Example: SPY’s $1.6 Billion Share Inflow
Let me give you a specific example that demonstrates the power of this approach. During a recent market analysis, we observed a significant build-up of call options in the S&P 500 (SPY) at a key strike price.
I identified a liquidity level in SPY at $585 when price was trading around $580. I posted the setup in my Telegram channel and took a position that would benefit from that exact move. This kind of foresight is what sets successful traders apart, allowing them to capitalize on market inefficiencies.
As price moved toward that liquidity level, the hedging activity kicked in exactly as expected. Market makers ended up buying north of $1.6 billion in SPY shares that particular day to hedge their option books. This influx of buying not only confirmed our analysis but also provided a clear signal of the market’s direction.
This was a gap higher from a Wednesday close to a Thursday open, and the trade closed for a 247% profit. Such outcomes are not anomalies — they are the result of understanding and leveraging the structural forces at play in the market.
That’s not luck — that’s understanding the structural mechanics of how market makers must operate. If price reaches a major strike price by the end of the week where institutional investors have massive call positions, market makers are required to have those shares available to fill exercised orders.
This regulatory framework is a key driver of market behavior, often dictating the flow of capital.
The beauty of this system is that it identifies these setups before the forced buying begins. As price starts getting closer and closer to that liquidity level, market makers will start to hedge their books in order to have the inventory available.
This proactive approach is what gives traders the edge in a competitive market environment.
This isn’t about predicting the future — it’s about understanding the structural flows that must occur when massive option positions exist at specific strikes.
And when you can identify those levels before the market gets there, you’re positioning yourself ahead of billions of dollars in forced hedging activity. This foresight is invaluable, providing traders with the confidence to act decisively.
That’s the edge I’m constantly looking for!
I’ll see you in the markets.
Chris Pulver
Chris Pulver 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. The ‘Liquidity Levels’ Wall Street Hides From You
The stock market’s a gamble — even Warren Buffett called it a casino.
But here’s the catch…
With enough money, you can make yourself right even when you’re wrong.
Stock prices move on sentiment — and the billions behind it. Confidence brings massive buy orders, prices rise. Fear brings sell orders, prices fall. It’s not emotion that moves markets — it’s liquidity.
You and I don’t have hundreds of billions to throw around. So the key is getting on the side of the market makers who do.
Using today’s trading tech, you can now spot where those big players hide massive buy orders — what I call “Liquidity Levels.” When price hits them, it can spark a 24-hour rally.
I recently hosted a live session showing how to identify these levels. While I can’t guarantee profits or prevent losses…
You Can Watch the Broadcast Here!
We develop tools and strategies to the best of our ability but no one can guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. From 9/18/24 – 10/23/2025 we have seen a 57% win rate on live trades with a 18% average return (winners and losers) and a 91% average winner with a hold time of less than 24 hours.
