One thing I think a lot of people miss about the NOPE is if you follow my reasoning from my post on it last night, it should work in *any* system with hedged derivatives, not even necessarily just US Equities.
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As long as the following three conditions hold: - Finite liquidity in the underlying - Hedgeable derivatives - Law of one price It should occur
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- Significant options volume relative to underlying - Options end-user flow structurally in one direction - Net positive dealer gamma
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Honestly I am somewhat skeptical even then (as discussed many times!) but the above three seem like necessary conditions for the proposed mechanism (dealer hedging) to work.
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So no it doesn't require net dealer positive gamma (it works regardless of direction as far as I know). Also in the first two the effect is still there, just perhaps not noticeable.
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Surely if dealers had net negative gamma, it would work in the opposite direction? That seems important!
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