An Epic Battle Is Raging Beneath The Market Surface | Zero Hedge
Putting it all together, we find that a combination of market euphoria, free options trading, and most importantly, few market-makers have sparked the fire. It also means that “a few large hedge funds understood this and have added fuel to the fire by pushing implied higher and higher and putting further pressure on the likes of Citadel and Goldman. With this process helping drive names like Apple and Tesla, this also makes sense why Breadth has been so terrible.”
The punchline, for all those who have been looking at the market action in recent weeks in stunned silence, well you are not alone, because as the PM concludes, “while most of the market is fading lower we are seeing a battle between a few big hedge funds and banks who are getting shorter and shorter gamma.“
Perhaps today’s snapback lower in Tesla and Apple stock, which both saw their market cap plunge by more than $100 billion in just the past 24 hours, is the start of an unprecedented gamma avalanche as the epic battle waging below the market surface in vol land between a handful of speculators and dealers reaches its conclusion.
This makes my head hurt, but this is supposed to be the thing to read this morning. Even for those who say tsk, tsk at Zero Hedge, which I kinda like. I think it means we’re getting very near a big pop of the bubble in Apple, Tesla, etc., but who the heck knows.