Until yesterday, I was confident there won't be any military action from Russia.
(At least no more than the undercover warfare that's been going on since 2014).
There are many reasons for this 👇
Ever since Crimea, Russia became isolated and took the backstage on the global geopolitical arena.
Putin was feeling a little lonely since no one took him seriously.
This Ukraine situation was a great way to gain back the attention and respect that he was seeking.
He didn't even need to invade.
Just putting a few tanks here and there allowed him to book back-to-back meetings with world leaders, who were all desperate to negotiate with him.
Moreover, if Putin were serious about invading (like he was with Crimea), he would just go for it.
Why the whole show of force?
Because this pollical theatre is very convenient for everyone.
Putin pretends to invade.
Biden and the West pretend to take him seriously.
Everyone's a winner, and there is no war.
Biden can go back and report that he prevented WWIII.
Russian state media can report about major concessions that Putin negotiated for the great people of Russia (or about whatever the fck they want, really...).
Win-win.
But yesterday's escalation casts doubt whether this is still pretend.
It's one thing to hold meetings and talks, being "deeply concerned" and taking the whole situation "very seriously".
But it's another to take action and start evacuating your staff.
Moreover, this is Putin we're talking about.
Applying logic and reason isn't exactly the right approach.
He can easily invade simply to prove a point.
Just because the world leaders didn't show him enough respect.
Or for any other reason, real or imaginary.
And he can do that despite even the most severe consequences on him personally.
Speaking of which...
Putin has been allowed to get away with many things for decades, both domestically and internationally (Litvinenko, Magnitsky, Georgia, Crimea, MH17, Skripals, Navalny...).
All without any significant consequences.
After each one, he just got bolder and more confident.
There's really no reason for him to believe that he'll face any serious consequences this time.
Overall, I still think (and sure fcking hope) that the war will not happen.
But I'm less confident in my view now.
And certainty more concerned given the recent developments.
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Are you tired from constantly living in the dark, fully unaware of the current Gamma Exposure?
Are you frustrated from having to guess the Zero Gamma level ALL THE TIME?
Are you annoyed from not knowing what the f*ck all of this even means!?!
I know, I was.
👇
Hello, my name is Sergei.
And today, I'll show you how YOU can change YOUR life, once and forever!
After this 10-minute tutorial, you'll be able to take full control of your gamma needs and live the life YOU want.
Impress your boss, colleagues, friends, spouse, children, dog!
By the end of this thread, you will be able to:
• Create a simple spot gamma chart for your favourite stock index.
• Compute its total gamma exposure.
• Construct a sleek-looking gamma profile chart 😎
• Calculate a Zero Gamma level (aka Flip Gamma).
But sorry, over the last few days I was very... busy... 🍷🎄
And looking into the #JHEQX roll, I can't say that I fully understand it.
(and based on the discussions, it looks like I'm not alone...)
Let's see what happened 👇
The trade sparked many heated conversations on Twitter, with everyone trying to understand what exactly will be its impact.
Some argued that there's a huge delta to buy, which might move the markets.
Others claimed that it's all been priced in already, and no money can be made.
What I want to understand is:
• Was there a huge delta to buy?
• If there was, why was the market down on 31 Dec?
• If there wasn't, why?
• If it's priced in, then how?
• What mechanics allowed #JHEQX to alleviate the market impact?
The media seems to attribute the current sell-off to new Covid variant.
However, I'm curious how much of the sell-off is actually due to Covid and how much is due to a less dovish Fed, as there were news that Fed might double its tapering and raise rates quicker than expected.
If the market is indeed falling due to a new variant, in my opinion, the impact might be limited.
Even if this variant is more serious than earlier ones, it's very unlikely it will have the same worldwide economic impact as the original coronavirus pandemic in March 2020.
The world has been living with Covid and we all know the drill by now.
If anything, an argument can be made that Covid is good for stocks, as $SPX more than doubled since its Covid lows.
A new variant can give Fed an excuse to carry on with QE and keep the BTFD mentality alive.