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Vanna Zones
Where does options flow act bullish on the market, where bearish? Vanna Zones reveal the price areas where option dealers exert strong influence on price — dampening or fuelling volatility and pushing the market in a particular direction.
Magnet & Repulsion
Under certain conditions Vanna can act strongly magnetic or repellent on price – the zone reveals where the hedging flow is pushing.
Bull & Bear Zone
Two overarching price areas on the chart: in the Bull Zone, under normal market conditions, Vanna supports buying and dampens volatility. In the Bear Zone it amplifies volatility and fuels selling.
The Rubber Band
At the edges of the Vanna Zones, energy has often built up that pulls price back, which can lead to strong reversal reactions in these price areas.
Oliver Sparing, Head of Trading at TradeNeon, explains.
Zone Edges
The zone boundaries act — especially in combination with other LOI levels — as strong reaction levels where we frequently see reversals.
Read the Regime
If price leaves the zone sustainably, the intraday hedging regime can flip, which calls for a fresh assessment and analysis of the situation.
Trade in Steps
Gauge volatility, define bias and context, position with the order flow.
Inside the Vanna Zone, option dealers take an especially strong grip on the market and become active through buying and selling. That gives us more opportunities to find potential trades.
