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

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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

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

And Warren is not selling


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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