Discover and read the best of Twitter Threads about #volamgeddon
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did I say USD go down? nope
in time of stress, $USD & $JPY both up
But $JPY would be up more in severe plunge
FX carry trade unwind
Everything in FX is driven by "seemingly risk-free" carry trade.
like shorting $VIX? risk_free? until it isn't $XIV
huge hidden left tail risk
in time of stress, $USD & $JPY both up
But $JPY would be up more in severe plunge
FX carry trade unwind
Everything in FX is driven by "seemingly risk-free" carry trade.
like shorting $VIX? risk_free? until it isn't $XIV
huge hidden left tail risk
Below showing "what carry trade gone bad" looked like in time of crisis, extreme fear
Carry trade unwind, fast & furious
Carry trade: short JPY to fund long USD & SPX
turkey 1001 day
elevator down
But $BOJ would step in and intervene at key support lvl
Carry trade unwind, fast & furious
Carry trade: short JPY to fund long USD & SPX
turkey 1001 day
elevator down
But $BOJ would step in and intervene at key support lvl
