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OK so Robinhood apparently has 3M new accounts as every millenial is now WFH and looking for apps to fill their time. They are almost certainly long, and long tech names. Some will have call options because cool
Question is what does that do to market structure now they are all in?
At some point they ahve to get run over as grandpa's pension exits what they entered. But how does this play out
If you look at Apr 2000 - Jul 2002 as the test case. SPX Index lost 50%, startup tech went to zero
I think thats too slow for the modern market though. ETFs make it easier & cheaper to exit as well as enter, zero commissions make 'investors' more active
That 50% of coourse has Sep 2001 shock in there, maybe a useful analogy for loss of confidence, liquidity etc
The way it ground down over that long must have been such a slow motion car crash. This will play out quicker. Weeks or months as pay checks the kids cant spend elsewhere go into stocks and get vaporized
From a vol perspective this is tricky. Say we bottom at 2000 SPX, takes a few months. Sep 2100P is roughly $45. That's not cheap, have to accelerate lower to make money there. Prefer something like the 1900-2300 PS also for about $45. That 9/1 payout is tasty!
(deleted previous version with 2000-2400 PS, was wrong price, though thats also a good use of 50 bucks)
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