Markets News Stocks 

Mystery trader ’50 Cent’ made $21 million from last Thursday’s stock market meltdown

“So what did 50 Cent do on Thursday, having finally reaped some fruits of his long-volatility labor?” writes Joe Ciolli for businessinsider.com. While the VIX has settled somewhat since Thursday, slightly paring its huge spike, there’s a growing chorus of market experts forecasting more turbulent times ahead. Source: businessinsider.com Share This:

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Markets News 

When all hell breaks loose in the markets, these securities go higher

“The iShares Gold Trust and the SPDR Gold Shares seek to track the price of gold, the oldest safe haven out there” writes John Melloy for cnbc.com. If they want a place to shelter from the storm, these securities have a track record of rising during times of market tumult, according to data cruncher Kensho.The market’s fear gauge had been unusually dormant, staying mostly below 12 for the last four months and even diving last month to its lowest level ever.Investors this week got their first taste of market pandemonium…

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Futures News 

All-time record options bets on volatility spook Wall Street over leverage risk

“The CBOE announced VIX options volume hit 2.56 million contracts on Thursday, a record for a single day” writes Dimaggio Kalish for cnbc.com. Options experts are saying Thursday’s record volume in volatility derivatives bets may signal a dangerous problem with the size of volatility-linked trading products.The focus is on the CBOE volatility index, a key measure of market expectations for near-term volatility as conveyed by the price of S&P 500 index options.One accomplished options trader said the dramatic one-day VIX surge Thursday likely stemmed from traders being forced to close…

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Markets News Stocks 

Gundlach’s ‘free money’ trade is already paying off

“The trade, Gundlach told Reuters, was “like free money.”” writes Akin Oyedele for businessinsider.com. “I think going long the VIX is really sort of free money at a 9.80 VIX level today,” Gundlach said, referring to the CBOE’s Volatility Index.This call is less of a wager on a stock market drop, and more of a bet that the quietest market in decades would become more volatile, Gundlach said.”I believe the market will drop 3% at a minimum sometime between now and December,” Gundlach said.The CEO of DoubleLine Capital who’s sometimes described…

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Markets News Stocks 

Traders are using scorching-hot tech stocks in a whole new way — and it could lead to their downfall

“That low volatility, in turn, has shifted the industry’s entire profile” writes Joe Ciolli for businessinsider.com. Historically a way to chase cyclical growth, investors have started to trade them as a safe, risk-averse alternative to bonds.”Mechanically, we expect that as the realized volatility of a stock drops, more passive ‘low vol’ strategies buy the stock, pushing up the return and dampening downside volatility. Source: businessinsider.com Share This:

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Markets News Stocks 

Why Gundlach says ‘coiling’ markets could spark a volatility surge

“One way or the other, [the 10-year Treasury yield is] going to have to break to the upside” writes Sunny Oh for marketwatch.com. Bond savant Jeff Gundlach says “coiling markets” could prompt a surge in volatility as Wall Street’s so-called “fear gauge” remains at multidecade lows.Yet the 10-year German government bond’s yield TMBMKDE-10Y, +0.63% also known as bunds, resides below 0.5%, while the 10-year Treasury yield TMUBMUSD10Y, -0.71% sits at close to 2.24%.Gundlach said he expected a 3% pullback “between now and November,” enough to cause equity volatility to spike.But…

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Crypto News 

Bitcoin is almost triple the price of gold – here’s what traders think you should buy

“Bitcoin has jumped 240 percent this year to a high of $3,288 on Wednesday, while gold was trading at $1,280” writes unknown author for cnbc.com. Two traders are unfazed by bitcoin’s meteoric surge and say that between the cryptocurrency and gold, you’re better off trading the yellow metal.But despite the bitcoin gains, Brian Stutland of Equity Armor Investments and Path Trading Partners’ Bob Iaccino believe gold is still a better bet than bitcoin from technical and fundamental perspectives.”If you price adjust and volatility adjust, I think gold still has a…

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Markets News Stocks 

Wall Street is shrinking even as the stock market hits new highs

“The Deutsche Bank FX Volatility Index (CVIX), a measure of investors’ expectations of future currency volatility, declined 29 percent” writes unknown author for cnbc.com. Realized intraday volatility for the S&P 500 was just 55 basis points in the second quarter.You can see the miserable state of the trading business in the results from companies like Virtu, one of the world’s largest market makers in stocks, bonds, commodities and currencies.Call it The Great Paradox, or Wall Street’s Miserable Summer: Even as the markets hit new highs and investor sentiment remains strong,…

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Markets News Stocks 

How Trump’s threat of ‘fire and fury’ is rattling stock-market calm

“On Wednesday, the stock market looked set to add to its losses” writes Mark Decambre for marketwatch.com. This month, however started with many investors living in La La Land, as seen by extremely low volatility and extremely high complacency despite high valuations and mounting political uncertainty. Source: marketwatch.com Share This:

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