Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Marko Kolanovic: Systematic Flows Largely Explain This Week’s Price Action
Last Friday, as market participants scrambled to discern the extent of systematic selling pressure during Wednesday's U.S. equities rout, JPMorgan's Marko Kolanovic released a brief afternoon note in which he assessed option hedging's role in the drawdown and weighed in on its prospective impact going forward.
“In terms of systematic strategies that drove the selloff, by far the biggest selling pressure was from option gamma hedging on Wednesdayâ€, Marko wrote, before delivering the
makes sense. retail isnt stampeding in, or rather out, to sell. theyve been well trained to buy the dips, ignore pullbacks, blame “etfs”, and focus on seasonally massaged, slow moving generalized economic data to make market investment decisions. they will sell some once we see a sub 1% gdp print, then sell by the bucket once the margin and portfolio lending margin calls come in.
Treasury is selling $300 billion of debt next week though. Guess it’ll be a good test of how much QT matters.
No wonder people call him God. He is also unfalsifiable. ‘The line will squiggle up, but if it squiggles down it is because of reasons.’ Got it.