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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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Tue, 06/18/2013 - 13:33 | Link to Comment TheMayor
TheMayor's picture

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

Tue, 06/18/2013 - 13:44 | Link to Comment flacon
flacon's picture

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

Tue, 06/18/2013 - 13:55 | Link to Comment flacon
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!

Tue, 06/18/2013 - 13:57 | Link to Comment kralizec
kralizec's picture

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

Tue, 06/18/2013 - 13:58 | Link to Comment rubearish10
rubearish10's picture

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

Tue, 06/18/2013 - 14:02 | Link to Comment dracos_ghost
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.

Tue, 06/18/2013 - 13:48 | Link to Comment rubearish10
rubearish10's picture

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

Tue, 06/18/2013 - 13:56 | Link to Comment TheMayor
TheMayor's picture

Sold the GE.

Tue, 06/18/2013 - 14:01 | Link to Comment rubearish10
rubearish10's picture

Lemme guess, you made money?

Tue, 06/18/2013 - 13:30 | Link to Comment Ancona
Ancona's picture

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

Tue, 06/18/2013 - 13:30 | Link to Comment Gmacks
Gmacks's picture

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

Tue, 06/18/2013 - 13:31 | Link to Comment Inthemix96
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.

Tue, 06/18/2013 - 13:33 | Link to Comment slaughterer
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. 

Tue, 06/18/2013 - 13:42 | Link to Comment Chappy
Chappy's picture

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

Tue, 06/18/2013 - 13:50 | Link to Comment slaughterer
slaughterer's picture

Japan will decline in choppy trade tonight.

Tue, 06/18/2013 - 14:34 | Link to Comment Shell Game
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!'   ;)

Tue, 06/18/2013 - 13:34 | Link to Comment lolmao500
lolmao500's picture

Kaboooooom going down in Russia...

http://rt.com/news/ammunition-depot-blasts-russia-888/

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 :

http://news.progorodsamara.ru/news/view/153574

Tue, 06/18/2013 - 13:37 | Link to Comment kralizec
kralizec's picture

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

Tue, 06/18/2013 - 13:43 | Link to Comment smlbizman
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...

Tue, 06/18/2013 - 13:48 | Link to Comment TheMayor
TheMayor's picture

13 million shells?

That could get ugly!

Tue, 06/18/2013 - 15:39 | Link to Comment Nick Jihad
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.

Tue, 06/18/2013 - 13:36 | Link to Comment slaughterer
slaughterer's picture

Ron Johnson to become CEO of Lululemon?

Tue, 06/18/2013 - 13:40 | Link to Comment kralizec
kralizec's picture

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

Tue, 06/18/2013 - 13:52 | Link to Comment ebworthen
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.

Tue, 06/18/2013 - 13:55 | Link to Comment kralizec
kralizec's picture

Sounds bearish...er mostly ish!

Tue, 06/18/2013 - 14:37 | Link to Comment Shell Game
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.

Tue, 06/18/2013 - 13:39 | Link to Comment JJ McApe
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%.

Tue, 06/18/2013 - 13:39 | Link to Comment ekm
ekm's picture

Really?

Who is the idiot selling the hedge?

Tue, 06/18/2013 - 13:43 | Link to Comment buzzsaw99
buzzsaw99's picture

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

Tue, 06/18/2013 - 13:39 | Link to Comment Caput Lupinum
Caput Lupinum's picture

Turbo Tuesdays are back baaaby!

Tue, 06/18/2013 - 13:47 | Link to Comment SheepDog-One
SheepDog-One's picture

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

Tue, 06/18/2013 - 13:41 | Link to Comment Yen Cross
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.

Tue, 06/18/2013 - 14:55 | Link to Comment Clowns on Acid
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 ??

Tue, 06/18/2013 - 13:47 | Link to Comment SheepDog-One
SheepDog-One's picture

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

Tue, 06/18/2013 - 13:53 | Link to Comment slaughterer
slaughterer's picture

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

Tue, 06/18/2013 - 13:57 | Link to Comment ebworthen
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?

Tue, 06/18/2013 - 14:02 | Link to Comment Kirk2NCC1701
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

Tue, 06/18/2013 - 14:26 | Link to Comment Yen Cross
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.

Tue, 06/18/2013 - 15:01 | Link to Comment Clowns on Acid
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.

 

 

Tue, 06/18/2013 - 15:27 | Link to Comment PontifexMaximus
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.

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