Having potential investors and trading friends reach out to hear my thoughts on current market state. I thought it would be helpful to share with you guys.
I hate engaging in the fear mongering nonsense, especially with the Evergrande situation being such a "hot topic" 🙄
anyways, there def was some impact from a positional standpoint going into Opex. This coupled with the fact that people are fearful about the knock on effects of the defaults in China are clearly moving markets but I personally believe there is something more relevant brewing.
The debt ceiling vote has a larger impact directly on the U.S and seems to be something a lot of folks are overlooking.
Yellen came out over the weekend stating that the Treasury's cash balance will be insufficient as of October.
”I love being long convexity but it would be better if it came cheaper. We are left trying to be creative using the vol surface or relative value relationships where we can”
Bingo !
The time to be long outright vol are on those days where vol of vol is getting destroyed and nobody wants to touch it. When you are faced with these environments (rising vol) it becomes much more difficult to structure things with value.
Idea generation is so important. I believe the best forms of alpha stems from regulatory / structural / legal implications.
I believe that the understanding of these factors and the changes that come along with them lead to alpha.
Understanding things like TRACE reporting is crucial when you are trying to identify agents and the moves they are making.
This market has become so complex. Betting a stock will fall because it has bad earnings is just a rookie’s playbook.There is no direct edge in those plays
Can you think about the recent changes in the microstructure that would be impactful to the overall picture.
Most vol guys understand this but there seems to be this disconnect with the rest of the world.
It’s frustrating to see the sell side reports printing that “skew is rich”, “tails are rich”.
Ok..... relative to what ?
Sure if you want to run a 20 year look back and show me that tails are priced rich compared to prices in the early 2000’s, 90’s, etc sure. Great.... but that is not the same market as the market in 2021. This market is completely different.
The microstructure, the regulatory implications, the sentiment, the participants, the agent’s role, even the assets etc. It is a completely different market.
We have seen this market move a few pct in a matter of a few hours. It is a completely different beast.
Seems like a lot of social media warriors & fake freedom fighters coming out to comment on this. Actually a great time to see who is full of sh*t or who cares about an active change.
Myself and the other partners at Ambrus recently teamed up with a small non for profit organization that helps the youth down in Georgia through athletics. They are very small but Coach Ken is a great individual who is making a true change by guiding the young men
Into areas that are not only based on athletics (emphasis on education and life after sports). These kids come from bad areas and broken households (just like I did). The funding for these types of smaller programs are often overlooked but these are the ones that have the largest
(Coming from a minority who grew up in a low income housing area).... I really really really wished AOC put as much effort into creating actionable change as she does with these self promotion marketing campaigns. This whole Robinhood persona with no change is getting old.
I have family members & close friends who are still dealing with the hardships of living under the poverty line.
It’s a brutal life that many really don’t understand. I have dealt with and seen some really messed up things in my life.
So when helping people turns into a gimmick or a prop, it strikes a nerve with me.
Truth is, I was a fan of AOC when she first hit the scene. I was rooting for her to really shake things up in an intelligent way that would ultimately benefit the people.