Part 3/6:
The concept of resistance in trading is pivotal. According to Quintus Ghabboli, the high open interest at the $120,000 strike tends to suggest a resistance level. This is primarily because call sellers, predominantly institutional investors, are likely to encounter significant losses if the price surges past this point. In effect, they may take measures to prevent prices from exceeding their comfort levels.
Conversely, the call option also has the potential to act as a "magnet," drawing prices even closer to this resistance due to the hedging activities conducted by market makers. These entities play a crucial role in providing liquidity to the order books, thereby influencing price dynamics.