Share this page!

baufinanciaphaster 👹 Profile picture
Twitter logo
18 Dec, 4 tweets, 1 min read
With close to ~$90bn to trade on the close, it was always going to come pretty close given a normal day's ADV.
That fall into the close on Tesla is classic ‘big name inclusion trade unwind’ pattern - people say “let’s not leave it all for the close, just in case” and put their ‘sell ahead of the close vs sell at the close’ ratio higher than the buyers do.

Now I’ve jinxed that. 🤓
Closing cross on S&P funding trade was about 8-9% larger than the S&P Global model would have suggested (I had it a trifle larger than even that but indexers might trade the tail. If they trade the tail on both sides, they’re already screwed going into the weekend b/c TSLA AH up.
A question outside observers should be asking themselves now is “What will Former Tesla Hodlers Do With $90 Billion?”

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with baufinanciaphaster 👹

baufinanciaphaster 👹 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @bauhiniacapital

baufinanciaphaster 👹 Profile picture
17 Dec
This is a take. The thread is worth reading for the take.
I expect it overstates things.

Couple of problems.

1) while vanna can drive moves, I expect it is more gamma curvature and density than vol (in real trader terms, vanna of one-week options is meaningless).
2) if this were the case, it would be the case for other stocks too, but TSLA did not have the highest realized volatility of S&P500 (or S&P+TSLA) for the 52wks to 13Nov announcement. It's #21. Sure airlines and oilcos and cruise companies were on the list. But banks are too.
3) What really drives that number - volatility - over time is volume, and volume is best understood by how much of a company's float is traded every day.

Every time someone buys/sells S&P500 and dealers/arbitrageurs have to buy/sell the shares, increasing intra-correlation
Read 19 tweets
baufinanciaphaster 👹 Profile picture
8 Dec
This convo is entertaining but painful to watch.

1) Oil traded in CNY does not change everything.

2) What Luke says here about why Kyle was short CNY is... wrong.

cc @LukeGromen, @JKyleBass - both have me blocked and @SantiagoAuFund, @_animal_spirits b/c they're here.
1) Aramco sells oil. Others do too but Luke has used the KSA selling oil in CNY example for a while so I'll use it.

Helpfully, we have the accounts from end-Sep.

Aramco sold SAR 930bn of oil+svcs in 12m to Sep20. Let's imagine for a second EVERY drop/service went to China.
Let's imagine China paid in CNH. If they did, then KSA would have to get the FX changed back to USD and SAR immediately. Why?

a) Aramco had SAR 372bn of costs - none of which were in RMB. And none of the cost basis wanted to receive CNH.

b) Aramco had operating expense and
Read 17 tweets
baufinanciaphaster 👹 Profile picture
7 Dec
No. This is not the way reserve currencies work.

Currencies do not become reserve currencies because they are easy to trade and ownership can be on the blockchain. They are reserve currencies because the owner can sleep at night with $100bn in one place in one asset.
In the end it is about trust. And reserve currency status is about a multitude of sovereigns trusting one other with the value of their accumulated ‘net retained export earnings’ - and the key is that the others with who’ll they deal have to respect that choice of collateral.
Afghanistan, the DRC, and Russia all have very low debt to GDP. But if some country held only treasury bills of those three countries’ currencies, one would not regard that as a wise choice of assets which would be deemed acceptable collateral to a vast array of other sovereigns.
Read 6 tweets
baufinanciaphaster 👹 Profile picture
11 Nov
I was asked to comment on this. So comments follow.

There is more to this thread above.

Please forgive typos. Happy to have feedback/discuss.
Read 10 tweets
baufinanciaphaster 👹 Profile picture
10 Nov
JPX Nikkei 400 has always been a RIDICULOUS Index but because it purports to have governance factors, it gets mindshare.

The fine print? In rebals, 40% of the ranking is ROE, 60% is size-related.

Result: big companies go in. Then they get the boot if they lose money.
Then when they make money again, they go back in.

Practical result? Stocks go up. They go in. They go down? They get sold. Buy high sell low.

The governance bit? IFRS, Independent Directors, English Docs, etc are meant to provide a swing of 10 names out of 400.
This year the rebal is 32 names in and 27 out (5 had been merged and they re-up to 400 only once a year). That's of 400 names.

And 60% of the flow in the trade is actually funded by bringing a half dozen names down to the 1.5% cap.
Read 6 tweets
baufinanciaphaster 👹 Profile picture
12 Sep
Beware China conspiracy theorists who source everything from Jeff Snider.

I was pointed at this thread earlier.
I am now blocked. Took two responses with actual data, so you'll have to click in.

This chart is Zoltan. He knows plumbing.

Mostly he knows his US plumbing.

The mechanism for foreign ownership of Japanese t-bills is that Japanese investors, corporations, and banks use yen assets to fund foreign asset purchases. Do an FX swap with a foreign bank to get USD, use the USD to fund purchases of assets.
The foreign banks will put the resulting yen into t-bills. That's how cross-currency swap plumbing works. So demand? Japanese banks know there is no growth. Japanese corps are relatively cash-rich, and Japanese banks have fewer and fewer customers for Japanese yen loans. For a
Read 39 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

Like this author's thread?

Get emails when @bauhiniacapital has new unrolls!

Check out other threads from @bauhiniacapital!

Read all threads by @bauhiniacapital