Hedging, Not Selling

Tyler Durden's picture

It appears that while investors seem loathed to sell their underlying positions, they are actively (and anxiously) hedging in equities and credit today...

The credit ETF (and CDS) market provides liquidity for active hedging - as does the VIX ETF and futures market...


We just hope the 'collaboration' among the non-sellers doesn't break soon. Will the game-theory break and managers realize that the first seller is the best seller...

Charts: Bloomberg

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TheMayor's picture

Not true, I'm 90% in cash and only hold some VLO, GE and a spec in PLM.

flacon's picture

So that's a 90% investment in USD. ALLLLL INNNN!!!

flacon's picture

After today's pricing in of a NON-TAPER, what happens when the Fed announces NO TAPER? It will be "sell the news". And what happens when Fed announces TAPER? Sell the news.... This market is cooked. Look at the indicators, Today is the pre-ejaculation moment of euphoria. As soon as Bermanke ejaculates it all goes limp. Trust me!

kralizec's picture

That'll fade fast once the booze-induced haze clears and you see what just banged you.

rubearish10's picture

Up further on Non-Taper and up even more on Taper 'cause Ben says so.

dracos_ghost's picture

Or is it noone in their right mind would short into this announcement. Bernanke is a historical whore. He will give the markets whatever they want so he goes down as the defender against the Depression. His successor  however, may the Lord bless his/her soul.

All I know is that everyone at a picnic a couple of weeks ago was a day trader again after years of whining their 401(k) was deep under water -- couldn't have a rational discussion that we are close to TSHTF. We prolly need one more blow-off to the upside before this is done. I think it just needs to be announced and off to the races. Sheep being herded into the gate to the slaughterhouse.

rubearish10's picture

"The Mayor", A.K.A. The Market Bellweather. Thanks for letting us know.

rubearish10's picture

Lemme guess, you made money?

Ancona's picture

Charles Ponzi would have been humbled in the presence of the present Masters of the Universe.

Gmacks's picture

I feel like this is the same story just worded differently.

Inthemix96's picture

A friends just sent me another one, you lot will like it.

Whats the difference between the White House and the Zoo?

Ones got an African Lion, the other got a 'Lyin African.

Boom fucking boom bitchez.

slaughterer's picture

I am outright short from this afternoon.  Maybe I will get Muppeted overnight, but I think not: watch what happens in Japan tonight. 

Chappy's picture

I'm short the NKU @ 13405.  You expect Japan to take a beating tonight or a monster rally?

slaughterer's picture

Japan will decline in choppy trade tonight.

Shell Game's picture

There is something nostalgic seeing some trading on ZH...

I remember the days of 'Buy FAZ......right......NOW!....no, THEN! No, buy FAS or your fooked!'   ;)

lolmao500's picture

Kaboooooom going down in Russia...


Russia blast: Huge explosions rock arsenal storing 13mln shells

This could be quite epic... now let's hope this wasn't triggered by a terrorist attack or else... uh oh.

Pics and videos :


kralizec's picture

The world is in an insane state, anything could happen, too many factions looking to cause/exploit trouble...unstable...ripe.

smlbizman's picture

if putin goes american, you can bet ur sweet ass those rebels in syria did it....look we have him trapped in a boat...

TheMayor's picture

13 million shells?

That could get ugly!

Nick Jihad's picture

This probably is not an attack. High explosives can become unstable after years of storage. But, you may ask, don't the people who run the arsenals know this? Why wouldn't they rotate out the old ammo and dispose of it safely?  Well, imagine you are the new guy running the arsenal, and you have discovered that your predecessor left you a bunch of thirty year-old ammo, which is stored beneath tons of twenty-year-old ammo that you'd have to move first to get to it. Oh, and the shelves and crates that hold this ammo are just as old, and quite rotten. Perhaps you decide that the better part of valor is to leave it be, and let your successor deal with the problem?  I have read that there were many Soviet-era arsenals in this condition.

slaughterer's picture

Ron Johnson to become CEO of Lululemon?

kralizec's picture

Awesome.  Will they get the JC Penney Johnson or the Apple & Target Johnson?

ebworthen's picture

You'll get Ellen DeGeneres with an iPhone tucked in her butt wearing see through Yoga pants bending over to pet the Target dog.

kralizec's picture

Sounds bearish...er mostly ish!

Shell Game's picture

Mostly ick!  When I think of see-through yoga pants I'll keep my image of Barbara Eden in I {wet}Dream of Jeannie......thank you.

JJ McApe's picture

basically more scamming by the fed and pump priming while shorting things to hide real inflation while selling it to us at inflated prices but then call there to be no inflation when prices go up more than 100%.

ekm's picture


Who is the idiot selling the hedge?

buzzsaw99's picture

they aren't using their own money so they aren't really idiots as per se

Caput Lupinum's picture

Turbo Tuesdays are back baaaby!

SheepDog-One's picture

Well, just ramp it EVERY day....who the fuck is going to do anything about it? Absolutely no one.

Yen Cross's picture

     Hedging indirectly or being {square/flat}, going into the Fed. tomorrow, is a good thing. (Personally, I'm taking the square/flat approach) 

Who want's to tie up equity in a trade that might take months or years to break even in?

A hedge is a hedge/and nothing more. I want to trade in the direction the market is moving in.

      One of the biggest problems traders have, is the inability to close losing trades.

Clowns on Acid's picture

Yen - Agreed, but also tghe Inv banks want to be in liquid positions os that they can find an exit at whatever cost. Unlike 2007/08 when the credit guys couldn't find a bid. That is why HY is down but equiites (Blue feckin' chippers mate) are up.

Who wants to be holding European sovereigns now ? That rap is about as liquid as a brick. Which is why I ask - why is Euro / USD so well bid versus crosses ??

SheepDog-One's picture

S&P +20 within a few hours time.....pure fucking insanity. Hmmm...better do some 'hedging' lol what a joke.

slaughterer's picture

It all depends on the type of leaks the FOMC snitches make to Whale/Squid tonight.  Overnight futures should tell all. 

ebworthen's picture

You have to ramp it up so you can sell on tapering talk by Ben tomorrow.

Or is it buy today so you can sell your gains six months from now after the Bernanke annouces $80 Billion/month direct purchase of Citi/BOA/Bank of Ireland shares?

Kirk2NCC1701's picture

So... Keep the game of Liars Poker going, but take out some insurance, right?  Casino Capitalism, baby!

I should introduce this game variant into our Wed night poker games. /s

Yen Cross's picture

   Have the .Gov disillusionists found {Jimmy Hoffa} yet?  FBI searching field for body of Jimmy Hoffa - chicagotribune.com

   Ram-a-mULE should be ecstatic, after the barrage of gunfire Chi-Town has experienced.

Clowns on Acid's picture

Fed will Taper the bonds ...buy the equities ? The Fed is trying to save the currency and can control the long end of the bond curve a bit. They would rather keep income going to the IRA's thru dividend streams than bond coupons.

They can always issue more bonds and buy them themselves (keep the Ponzi going with bonds) to keep the lid on the boiling pot (or so they think), but if equities take a 10% bath..... the sheeple will panic.



PontifexMaximus's picture

I would like to see every week a FOMC meeting, so at least then I'd know that PM's and the USD are heading south and markets north, QED.