MARKET FRAGILITY TESTS OPTIONS TRADERS AS VOLATILITY ABATES
https://s.yimg.com/ny/api/res/1.2/aKRKGMVDdpv3xWK4_ORE3g--/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyMDA7aD03MTQ-/https://media.zenfs.com/en/bloomberg_holding_pen_162/a8430ef2de0924ce99bdd9624f0d1284
✍️ The stock market is fragile and prone to sudden volatility spikes, with the recent jump in the Cboe Volatility Index (VIX) being a prime example.
👉 The stock market is fragile and prone to sudden volatility spikes. 👉 The recent jump in the Cboe Volatility Index (VIX) was more extreme than during previous volatility spikes. 👉 Option market makers and dealers contributed to the VIX jump by becoming short volatility and covering their shorts. 👉 Leveraged ETFs can exacerbate market volatility and liquidity stress. 👉 Banks face risks from facilitating trades in leveraged ETFs, including gap risk and contagion risk.
-- #KieranDiamond #GarrettDeSimone #AntoinePorcheret #DonaldTrump #business
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