MSOS Gamma Map: Dealers Trapped Into Opex & WSB Whale

 Some whale or degen on Wall Street Bets posted his book this week & the internet did what the internet does. One hundred thousand shares of AdvisorShares Pure US Cannabis ETF (MSOS) at $3.9949. Two thousand of the November 6 $4 calls at 18 cents. And the lotto ticket: 13,000 of the November 6 $4.50 calls at 7.86 cents apiece. Call it $138K of premium strapped to $400K of stock, with the ETF marked at $3.94 in the screenshot and four days on the clock. You can likely guess where we're going with this.

Tuesday the country voted & $MSOS closed at $4.49. At 4:10 PM, before a single poll had closed, the bid was already $4.68 on 13,100 shares against a $4.74 offer. Wednesday's pre-market printed $4.72, up another 5.3%. That's a 20% run from the whale's screenshot in about two sessions, and the reason isn't a mystery. Democrats took the House and the Senate. The cannabis bills that have passed the House over and over again finally have a Senate that can clear them. We'll get to that in the back half. First the map, because the map says the dealers are in trouble heading into Friday's opex, and that's the story of how a move like this feeds itself.

The whale's book, marked to Wednesday's pre-market

At $4.72 the stock leg is up about $72,500. The 2,000 $4 calls carry 72 cents of intrinsic, about $144,000 against $36,000 paid. The 13,000 $4.50s carry 22 cents of intrinsic, $286,000 against $102,180 paid. With two days left and vol north of 120, the bid on those is closer to 30 cents, call it $390,000. Round it off: roughly $465K of open profit on a $536K outlay, and most of it came from a leg that cost less than a used pickup. We can't verify the account. Screenshots are screenshots & for all we know he flipped them at $4.30. Doesn't matter. His 13,000 contracts are 29% of everything open at the November 6 $4.50 strike. One retail account sat on nearly a third of this Friday's biggest line. Somebody sold him those. That somebody is a dealer, and the dealer is the one in trouble.

The flow that came first

Before the whale screenshot went viral, the tape was already talking. The flow screen caught three ask-side prints in the November 13 $4.50 calls. First, 800 at 16 cents at 9:33 with the ETF at $4.06. Then 1,000 at 24 cents three minutes later with spot at $4.13. Then a 750-lot block at 29 cents at 12:33 with spot at $4.26. That's 2,550 contracts, about $58,600 of premium, all bought at the offer while implied vol climbed from 114 to 134. Sweeps at the ask aren't hedges. They're somebody who wants it now. Those three prints alone make up two-thirds of the 3,806 contracts open at that strike today, unless the buyer's already out.

The map, strike by strike

Here's the board as of Wednesday's 8:30 AM open-interest snapshot, with the ETF at $4.72. Calls on one side, puts on the other, and the puts barely register. Dollar gamma figures below are our estimate at 120 vol, per 1% move in the ETF, for the dealers who are short these calls.

November 6, this Friday. 82,802 calls open against 8,121 puts, ten to one. The $4.50 strike holds 44,314 contracts. The $5.00 strike holds 24,994. The $4 strike is the only two-sided line on the sheet, 6,438 calls against 6,552 puts, which makes $4 the floor and nothing below it worth talking about. With spot at $4.72 the ETF is sitting dead between the two biggest weekly strikes on the board. Those two lines alone throw off about $1.2 million of dealer gamma per 1% move. The whole weekly throws off $1.27 million on the call side against $43,000 on the put side. The November 6 expiry carries roughly half the gamma on the entire board & it expires in two days.

November 13. Thin. 12,345 calls, 450 puts. The $4.50s (3,806) and the $5s (3,942) are the only strikes with a pulse, and we already told you where most of the $4.50s came from.

November 20, the monthly. 138,693 calls against 4,480 puts, 31 to 1, which is about as lopsided as a sheet gets. The $5 strike holds 28,217, the $6 holds 26,479, the $7 holds 37,991 and the $10 holds 27,681. The monthly contributes about $563,000 of call gamma per 1% move, with the $5 line doing $210,000 of it. The $7s and $10s are mostly lottery tickets at this spot. They stop being lottery tickets fast if $5 goes.

January 15, 2027. The Congress trade. 250,353 calls against 19,990 puts. The $5 strike is the monster: 92,453 contracts, 9.2 million shares of deliverable. The $4 strike holds 32,402, the $6 holds 21,842, the $10 holds 57,315. Puts are a rounding error, 6,575 at $3, 5,446 at $4, 3,898 at $5. January contributes about $707,000 of call gamma per 1% and the $5 line is $322,000 of that. This is the expiry that straddles the new Congress being sworn in on January 3, and the board knows it.

Add it up. About 484,000 call contracts open across four expiries, 48 million shares of deliverable stock, against 33,000 puts. Call gamma on the board runs about $2.6 million per 1% move. Put gamma is $119,000. That's not a two-way market. That's a one-way street with a dealer standing in the middle of it.

Dealers are in trouble heading into opex

Here's the mechanics, short version. Retail bought those calls at the ask. Dealers sold them. A dealer who's short a call hedges by buying stock, and he has to buy more as the stock rises toward the strike, because the option's delta rises. That's short gamma. It means the dealer chases: he buys strength, sells weakness, and makes every move bigger than it would've been on its own. Now look at where Friday's book sits. Dealers are short 82,802 weekly calls against 8,121 puts, and they sold most of them when the calls were nearly worthless. On the whale's screenshot the $4.50 call was a 7.86-cent lotto with a delta in the teens. Wednesday morning it's a 72-delta option on 44,314 contracts. The hedge on that one line went from well under a million shares to about 3 million in two sessions. That buying is a chunk of why $3.94 became $4.72. Oh look, 20%.

And it's not done. The next line is $5. Two days out, the $5 call carries a 27 delta and almost the same gamma as the $4.50s. Every nickel higher, the dealer who's short 24,994 of them buys more stock, into a tape that's already running away from him. Through $5, the $4.50s go deep enough that their gamma fades and the $5s take over as the fuel. Then the monthly's 28,217 $5s and January's 92,453 $5s start pulling on the same rope. That's the squeeze path, and the dealers are on the wrong end of it with two days to go. The $1.27 million of weekly gamma isn't a stat. It's the size of the problem. A 1% move forces about that much stock through the hedge. A 10% day forces something closer to $12 million, and nobody absorbs that quietly in a $4.72 ETF.

The dealers' only way out is a pin. If Friday closes between $4.50 and $5, the $4.50s settle for intrinsic, the $5s expire worthless, and the dealers sell their hedge back into Friday afternoon. Two days of gamma is also two days of decay. The vol that got the $4.50s to 30 cents is the same vol that gets crushed the second the ETF stops moving. That's the bear case for the weekly, and it's the only one the dealers have. The trouble is the monthly is sitting right behind it with 138,693 calls, and January behind that with 250,353. They don't get a clean slate on Monday. They get a different expiry with the same problem.

Part two: a Democratic Congress and the Senate hurdle

Now the catalyst, because the map explains the mechanics and the midterms explain the motive.

Democrats won the Senate and the House. CBS projected Senate control a little after 11:30 Tuesday night, and the AP called the House early Wednesday morning. Seven Republican seats flipped: Ohio, Iowa, South Carolina, Maine, North Carolina, Kansas and Texas. Kansas. Texas. As of Wednesday morning it's 54 Democrats to 44 Republicans with Alaska and Mississippi still counting, and Mississippi is separated by dozens of votes. Schumer is set to run the floor again in January. Jeffries gets the Speaker's gavel. The new Congress seats on January 3, 2027, twelve days before that January expiry.

Why does that light up a cannabis ETF? Because the Senate has been the graveyard. SAFE Banking passed the House seven times between 2019 and 2022. The first vote, September 2019, was 321 to 103, with 91 Republicans voting yes. McConnell never let it near the floor. Then the Georgia runoffs handed Democrats the Senate in January 2021, cannabis ripped, and Schumer sat on it anyway while he chased a full legalization bill that was never getting sixty votes. In September 2023 the renamed SAFER Banking Act cleared the Senate Banking Committee 14 to 9, and it still never got a floor vote. Fifteen months on the shelf. Then Republicans took the Senate in 2024 and the bill went nowhere for two years.

So here's the 2026 version. The SAFE Banking Act of 2026 was refiled on June 24 as S. 4942, led by Jeff Merkley with Lisa Murkowski, Steve Daines and Elizabeth Warren. The House companion, H.R. 9471, belongs to Dave Joyce, an Ohio Republican, with seven cosponsors. The American Bankers Association endorsed it on July 1. And Trump said as a candidate that he supports cannabis banking reform, so the signature at the end of the line isn't the problem.

What changed Tuesday is who runs the committees. Warren is the ranking Democrat on Senate Banking and a cosponsor of the bill. In January she's in line for the chair. The committee that passed SAFER 14 to 9 in 2023 would be run by someone whose name is on the bill. House Financial Services goes back to the Democrats who moved SAFE in 2019. The House has passed this thing seven times & will pass it an eighth. The only question has ever been the Senate floor, and the man who controls that floor just got rewarded with seats in Kansas and Texas. Banking a legal industry that employs hundreds of thousands of people and pays its taxes in cash is the easiest bipartisan bill on his desk.

Now the edge. Fifty-four isn't sixty. Cloture still takes sixty votes, so the bill still needs Republicans, and Daines, its Republican anchor, retires in January. The good news is this bill has always had Republicans. Cannabis Business Times reported there was enough support to beat a filibuster in the last Democratic Senate; Schumer just never called the vote. Murkowski's on the bill. Sullivan, if he survives Alaska, cosponsored SAFER. The whip count isn't the hurdle it was in 2019. The hurdle is whether Schumer learned anything from 2021. Our bet is he did, because a bill that passes 14 to 9 out of your own committee and dies on your desk is the kind of thing that gets thrown at you when Kansas asks what it got for its vote.

Also note what Tuesday did not change. Rescheduling is the executive branch's game. State-licensed medical cannabis has been Schedule III since April 28, which already pulls 280E off the medical side of the business. The broader hearing on all cannabis ran June 29 to July 15, got paused over a GAO report at the end of September, and on October 22 the judge refused to reopen it. The recommendation is still pending and Terrance Cole still has to sign it. Congress doesn't control that calendar. Voters did settle one thing: Massachusetts rejected Question 8, the repeal of adult-use sales, by about three to one, so Curaleaf Holdings (CURLF) keeps a market it's heavily exposed to. And the federal ban on intoxicating hemp starts kicking in on November 12, which clears the gas-station competition off the shelf right as the banking story gets legs.

How we trade it

Our standing rule hasn't changed: assume the news doesn't happen and trade around a core position. We laid out the core and the January $4 and $3 puts in October, along with the 30% rule that goes with it. On a move greater than 30% in our favor, cut stock by 60% and options by 90%, lift stops to 15% below the new level, and reload in tiers once price is 15% above the move. The whale's $4.50s are up about 280%. The rule says he keeps 10% of them and lets the lotto be a lotto. The cream still rises, and the cream is still $TRLV and Green Thumb Industries (GTBIF). That's where the January $5 calls make the most sense to us, instead of chasing a weekly with two days on the clock. Our book is unchanged, with one add: we picked up $TSNDF on Tuesday.

What we're watching is simple; follow through

Friday's close decides whether the dealers get their pin at $4.50 or $5 breaks. A settle above $5 forces the monthly's $5 line into the hedge and sets up the November 20 squeeze. A settle between $4.50 and $5 drains the weekly gamma, and we'd expect a softer Monday.

Thursday morning's open interest tells us whether the $5 strike is being bought or sold. If the November 6 and November 20 $5 lines grow on an up day, dealers are getting shorter and the squeeze thesis is alive. If they shrink, the crowd is taking profit and the move loses its fuel.

Senate Banking is the committee to watch once the new Congress seats. A markup of S. 4942 in the first quarter means the bill is on a path to the floor. Silence through March means we're back to 2023.

The judge's recommendation on broad Schedule III can drop any day, and it doesn't need Congress. A favorable recommendation plus a banking markup is the scenario those 92,453 January $5 calls were bought for.

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Disclosure: The author and affiliated entities are long $TRLV, $GTBIF, $MSOS, $MSOX and $TSNDF, along with options expiring into 2027, and may trade around those positions at any time without notice. Jefferson AI has no business relationship with AdvisorShares or any company named above. Nothing here is investment advice. Screenshots attributed to a Wall Street Bets user are unverified.