---
title: Option Market Makers' Hedging Model
url: https://www.ml-quant.com/papers/ssrn/4936978/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-09-26
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: SSRN 4936978
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4936978
featured: 2024-08-28
citations: unknown
topic: Derivatives & Volatility
---


# Option Market Makers' Hedging Model

The model suggests that the way Option Market Makers manage their option inventory can cause unpredictable changes in stock prices, with their net option position being a key predictor of SPX futures' end-of-day return.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4936978
- Identifier: SSRN 4936978
- Released: 2024-08-26
- First featured: Quant Letter No. 63 (2024-08-28): https://www.ml-quant.com/issues/2024-08-28/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Derivatives & Volatility

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