I found my answer... Sept 6: What Just Happened over the last Nasdaq 14 days? 1. A Colossal buyer (SoftBank) distorted the price of upside calls on eight stocks. 2. Quants and Robinhood piled on, further distorting markets. 3. Dealers who have been destroyed in recent years (selling vol) holding a small deck, they had to get long more and more stock to hedge upside market risk. 4. As stocks surged, dealers who sold upside calls – must hedge even more as – out of the money options they sold – pick up more delta. Banks buy more stock. Call-put skew reaches record territory on several big-name tech stocks, meaning the cost differential to buy upside vs. protect the downside, reaches all-time wide levels. 5. Nasdaq is nearly 60% 12 stocks, this “three-card monte” game above has a large impact on passive index funds. 6. The original, colossal upside call buyer exits some of their position. 7. Dealers / banks MUST sell stock in size, take off their hedges, sell Mortimer, SELL. 8. Selling brings out more selling, banks take off more hedges as the options lose delta, MORE selling. 9. The little guy / gal gets left holding the bag.
Brilliant. So this is it, the 35ish% percent drop we already saw once this year, is now well underway and will materialize before the election. Hell of a time to be long swing.
@Overnight What a coincidence! Just read this. We are SO going lower: https://www.cnbc.com/2020/09/08/jim...he-sell-off-take-something-off-the-table.html “When we rebound from this sell-off ... I’m insisting you take something off the table ... because it’s rational,” CNBC’s Jim Cramer said.