In theory, when the Fed released liquidity to rescue small banks, the run on banks should be over and bank shares should rebound.But it's too early to cheer from an options move perspective, and the bears may still be playing with the FOMC.There was a big order yesterday of $First Republic Bank(FRC)$ put options expiring this week with a strike price of 10:$FRC 20230324 10.0 PUT$ Coincidentally, the $SPDR S&P Regional Banking ETF(KRE)$ also saw a large volume of put expiring this week:<
The agency's next goal? Focus on Thursday opportunities
One of the big surprises last week was that the Federal Reserve opened up the water again, providing another $300 billion of credit to the banking system. If interest rate cuts are interpreted as missiles, this credit supply can be interpreted as handing banks a revolver with plenty of ammunition. From the Fed's point of view, a problem that can be solved with a gadget doesn't need a big one.Liquidity is indeed provided objectively. The apparent spillover of liquidity sent tech stocks soaring, not knowing whether the market was unnecessarily misunderstood or not doing the right thing.The experience was eerie: it was as if the community had organized fundraising for critically ill patients, only to find that the patients' homes had been equipped with the latest computer 3D printers and VR d
Introduce an opportunity with a 43% annualized return
Since the market gives the opportunity, then I also welcome to lie flat. Who doesn't like easy trading to make a lot of money?《Here's a dark horse stock of 2023》 Introduced this year's dark horse $Microsoft(MSFT)$ . institutions in the face of next week's FOMC pressure, also sold the in-the-money put option.Selling at-the-money puts is a risky move at this stage, meaning there is a high probability that the stock will be exercised.But the institutions did it anyway, this shows that Microsoft is worth exercising.Looking at yesterday's options move, the strategy is even more exaggerated:sell
Why did the call option close out? Aren't tech stocks up?
There were two events in March that reversed financial markets. Not non-farm and CPI, but the cascading effects of Silicon Valley bank failures and Chatgpt-4.The former affects the liquidity of the capital market, while the latter is a technological revolution that reverses the valuation of the AI industry at a stroke. From a value investing perspective, I think the latter is more far-reaching.Anyway, after these two things happened, I really want to see if those big orders are still holding positions.In the article "Show the cards! Market trends prior to March 24：bearish！", Apple, Google and Amazon all closed their sell calls due on March 24th; The sell call of Tesla's 210 strike price has not been closed, and is now making
Last week Christine Lagarde, the president of the European Central Bank, vowed to raise rates by 50 basis points. I wonder if the ECB will be as firm on rates tomorrow, Thursday.$SPDR EURO STOXX 50 ETF(FEZ)$ The credit crunch has spread to Europe. Credit Suisse's big Saudi shareholder refused to come to its rescue, sending shares down 25% in early trading, triggering a panic sell-off in European shares.But there's not much reference to options trading. Because the early put doubled its money at the open and then closed 3/4 of the way. The rest of them are running away with their profits, with a different mindset.Whether Ms Lagarde raises rates or not makes no difference. But if you open short positions today, you might want to be wary of the govern
If you win $10 million in the lottery, will you continue spend $5 million on the lottery?
Yesterday Biden expressed confidence that he would show results in fighting inflation. I thought CPI had to fall to the 5.xx%. As a result, CPI in February was unchanged as expected at 6.0 percent and core was also unchanged at 5.5 percent. Month-on-month, it was slightly higher, at 0.5%.There is a long way to go in the fight against inflation, and a quarter-point rise cannot be missed.$Financial Select Sector SPDR Fund(XLF)$ Source of titleclosed $XLF 20230616 32.0 PUT$ roll
I'm not good at analyzing bank assets, so let's analyze big option orders.On Thursday, the main explosion was in these sectors: banking, securities, insurance and real estate, as well as some loss-making emerging industries such as offline medical and new drug development companies.Before we had fully reacted to the event, several companies were bought with put options. Keeping an eye on whether these options are closed and rolled will help gauge how things are going.The reason why we did not choose the big four banks is that the direction of trading is confused.$American International Group Inc(AIG)$ A $10 billion insurance company. The 52.5 put was opened on February 2, and it's possible that the big man was one of the first to plot the collapse
Just saying that AMD and Nvidia had no big options moves on Tuesday, then here we are on Wednesday:$NVDA 20230915 180.0 PUT$ $NVDA 20230915 360.0 CALL$ So these traders have been meeting on Tuesday to discuss how to respond to a 50 basis point rate hike, right?According to the understanding of the label and transaction price, the direction of buying and selling should be like this:buy
Show the cards! Market trends prior to March 24：bearish！
After more than a month of sideways, bulls and bears are impatient, Powell is also impatient, even said to speed up the pace of rate hikes, so the March rate hike probability of 50 basis points into 70%. Yesterday's article mentioned that there are two opinions in the market:Ultra-hawkish rate hike: 50 basis point rate hike probability in MarchDovish: The Fed can live with 3% if inflation doesn't fall quickly to 2%.Before yesterday, the market favored 2 more than 1.At the start of the year, the consensus was for a longer rate rise, not a higher one. There is a consensus that inflation cannot fall quickly, but there is a sense that rate rises need to be gradual and Mr Powell is unlikely to reverse his plan for gradual quarter-point increases. If inflation cannot come down quickly, the Fed'
Institutions sell put options and do not fear hawks
With expectations of a soft landing reduced, there are two more views than there were in January and February:Hawkish talk: 50 basis point rate hike probability in MarchDovish talk: If inflation doesn't fall quickly to 2%, the Fed can live with 3%.The mystery will begin to unravel over the next three weeks. Powell will deliver his semiannual monetary policy return to Congress on Tuesday and Wednesday, live at 10 p.m., totally hawkish. It's hard to say if the February non-farm data will beat expectations on Friday night, but it wouldn't be surprising given the past few releases.So how hawkish will Powell be tonight?I found an interesting option order in $Invesco DB US Dollar Index Bullish Fund(UUP)$ ：sell