Vanna flows are the dealer hedging trades triggered when implied volatility moves — because vanna links delta to volatility, a change in IV changes dealers’ deltas, forcing them to re-hedge. In the common short-vanna regime, that means falling vol forces buying.

The mechanism

When dealers are “short vanna,” a drop in IV increases the delta they need to hedge, so they buy futures/shares to stay neutral. That buying can lift price — which can calm vol further — which forces more buying: a self-reinforcing loop. It’s why markets so often grind higher as fear fades, and why a post-event vol crush can spark a rally.

When vanna flows dominate

They’re strongest around volatility resets — after a scare passes, into and after OPEX, and when a big VIX spike fades. In high-volume environments these vanna loops can produce outsized moves detached from fundamentals. They also work in reverse: rising vol can force selling.

Vanna flow is the market’s calm-buys-calm engine: falling volatility forces dealer buying, which calms things more, which buys more. A rally built on plumbing, not news.

What it means for a scalper

Vanna flows explain drift you can’t pin to a headline — especially the steady lift after fear subsides. You can’t see vanna directly, but you can recognize the regime (falling VIX, calming tape) and respect the upward bias it creates. It pairs with charm flows as the two big second-order forces on the tape.