So much cash on the sidelines (that can be deployed or re-deployed)

by WSBConsensus

Total U.S. money-market fund assets grew by $13.61 billion to $3.589 trillion for the reporting week ending Feb. 25

Add buyback bid unspent war-chest ($4bn per day in working buy orders)

Add Private Equity unspent war-chest. PE wont care about no corona in their DCFs

Add that CTAs just finished selling and if anything will turn buyers from here

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Add that the retail investor seems to continue to add to FANMAG and TSLA through this sell-off

And Warren is not selling

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Monday + Tuesday “selling suspects”

  1. Option hedging (gamma) likely resulted in $40-50Bn of outflows
  2. CTAs ~$40-60Bn selling
  3. Volatility targeting strategies ~$40-60Bn of selling.
  4. Market depth dropped by over 50%, so this total selling of ~$150Bn produced a large market impact.
  5. Dealers’ gamma turned significantly short, so selling on account of option hedges was ~$15-20Bn on Monday, and ~$25-30Bn on Tuesday

 

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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