I think this is the biggest threat for all of us if we do see a sharp and sustained correction. 3% will snowball into 7%, 7% into 10%, 10% into who knows what.... Aren't many of these really long materials/commodities? What happens if 22% (about 1.56 trillion USD) of the equity market makers suddenly get flooded with redemptions? Many of them were already treading water prior to China's 10% blow-up today and the negative action here.
What are you talking about, Hedge Funds underwater. Aren't they hedging (I wouldn't be concerned with what they're long but with what they're short: JPY )
Japanese Yen +149 what more can you ask for ? These carry whatever trades should unwind as well , as l have said on other posts bets totalling 160 000 contracts (each contract is 2 500 000 Yen ) against the currency of a first world sovereign country continuing to fall is madness. My beliefs and perceptions may be wrong from time to time, and thats life, but heck l know what madness looks like !
1 lot = 12.5M yen, you left the 1 off. I agree. If what we're seeing is just the beginning of the carry unwinding, then there is much more pain in store for long funds. This correction is long overdue, hopefully it doesn't snowball into something really damaging like last May (or worse).
Would not mind something like last May happening because l only trade my perceptions, beliefs and thoughts of the market, if l am incorrect in my analysis l simply wait for true confirmation (being stubborn ) or l join the other side. I am a double agent, wine and dine with both bulls & bears....
A threat? Are you kidding me. Clearly you never gamed HF liq or panic selling. This sort of action would create a fantastic op. Get your head in the proper mindset or you`re doomed.
So, are you going short now, or would you wait for clear signs of distress? Premiums would rise rapidly once the news is widely disseminated, no?