The Real Reason For Monday’s ‘Biblical’ Stock Reversal

Monday morning was the first time clients had to "outright sell stuff," Nomura's Charlie McElligott wrote Tuesday, as US equities continued to careen wildly about. Portfolio VaR, he wrote, "just absolutely blew out." That, in turn, dictated mechanical deleveraging, which eventually gave way to tactical considerations for the discretionary crowd, who started playing offense, selling puts and buying calls (or selling vol and buying dips, if you like). Headed into the week, the setup in the vol