Notionals as fundamental catalysts?
The author asks how options notionals and dealer hedging can act as fundamental catalysts for stock price action.
Could someone give me a quick ELI5 on how options notionals can act as a fundamental catalyst for price action? Maybe this is outlined in some respurce somewhere but given that many people like to track and report on this, I figure it's easier to hear it from them.
My understandinf is that options, as a derivative asset/instrument, can only serve to reveal trader sentiment, since options trades dont actually reflect in shares, UNLESS a contract gets exercised.
Another thing I think I've noticed, is that when the market stalls at certain levels following such excersicions/assignments, that price stalling is directly caused by institutional volume, being forced to buy/sell at that level, thereby flipping the trend whenever they have to bail. However, the former DOESN'T NECESSARILY necessitate the latter, from what I've gathered. Notionals don't NECESSARILY govern price action, and yet, the options market and \its\ volume has yet still become one of the most predominant driving forces in price actions, irrespective of the money-ness of the notionals. How does this work? Are there gaps in my knowledge here?
Hoping to open up a general discussion on, well ig, the notion of notionals as a fundamental catalyst. Do yall thino thats true or not? Otherwise I'm open to being directed to whatever relevant resources that are already known. Cheers

r/options