Kerberos007
@kerberos007
·
Aug 21
These “crash” hedges are so “outsized” simply due to the massive scale of “50 Cent” Aug VIX Call Wing positions which Dealers are short—and thus they have been forced to get long a lot of S&P Vega via VIX futs, S&P downside or just “shorts” in Spooz to offset this exposure
https://www.zerohedge.com/news/2019-08-21/here-short-gamma-reason-behind-todays-market-
The catalyst behind said hedge unwind is the previously noted recent re-emergence of the infamous “50-cent” VIX trader, who forced dealers to take opposing positions to his/her Call Wing positions, which due to positive gamma and dealer vega balancing, were forced to keep buying stocks the higher the market rose, and the lower VIX dropped, to wit:meltup