Posted:
March 27, 2023
On the failure of SVB and Fed’s BTFP credit facility…

Bank: Hey! Fed, help us!!! Fed: Yo, what’s up? Bank: We need some cash, quick! Fed: Hey, calm the fck down… What’s the problem? Bank: You told us in 2021 rates will be zero until like forever! So we loaded up on some crap mortgage bonds that pay peanuts. Fed: Lol! Bank: Don’t fcking lol […]

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Posted:
December 9, 2022
Upcoming $2.5T OpEx and the Santa Rally

Next week marks the so-called triple-witching when SPX, SPY and ES options all expire. Around $2.5T of options are set to expire next Friday, and like other December expirations, it will be the largest this year. So what does it mean for the markets and the Santa rally?? This expiration is large, however, for a […]

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Posted:
June 18, 2022
Why is Vol and Skew Underperforming and What It Means?

Skew has been flattish for some time this year, despite a decline. Since the year started, the sentiment was bearish and market participants were overly hedged. As the market declined – implied vol went up, but it still underperformed, given the magnitude of the moves. Today ? a spike in short dated?-sticky skew. This is […]

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Posted:
May 7, 2022
The Fed Won’t Save Us From Stagflation

No need for a coffee – this one’s easy. In this post, you’ll get a solid understanding of inflation and stagflation. You’ll learn: How Fed can cause inflation. How the growth/inflation relationship can break. Current stagflation drivers. Fed’s failure to fix it . Last week the US GDP reading came at a negative 1.4%. Along […]

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Posted:
April 21, 2022
What Does the Options Market Say About the Stock Market?

What does the options market say about the stock market? Despite the negative sentiment and risks, investors don’t seem to put their money where their mouth is. Due to little demand, hedges are screening cheap, and vol sellers are coming back. Here’s what I’m looking at ? Market isn’t expecting tail events into the next […]

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Posted:
April 19, 2022
Six Reasons for a Strong Dollar

So what’s going on with the dollar? Wasn’t it collapsing under the weight of inflation and recession, soon to be replaced by the RR (Renminbi-Ruble) currency system? Despite many arguments for a weaker USD, the dollar index $DXY actually gained 10% over the last year. How so? I asked this question on Twitter and want […]

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Posted:
April 5, 2022
Keep Calm and Carry On.

“Keep calm and carry on.” – that’s the motto of this market right now. +0.81% on the SPX today, and the risk-on is in full swing this spring. Flashbacks of 2021 are all over the place – tech, growth and crypto are all higher in the last few weeks. Even though only half of S&P […]

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Posted:
March 11, 2022
Why is VIX Underperforming, Inflation Print and Upcoming Fed Meeting

Quite an eventful day today. First, it’s interesting to see a -0.4% down move in $SPX accompanied by a lower $VIX. Historically, it’s not often that $VIX loses 2 pts on a half-percent sell-off in $SPX. It still sits >30, implying daily 2% moves in $SPX. If $SPX realizes anything less than that, it should […]

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