Who Else Noticed This Big Short Today (I Didn't)

Today, someone took out a huge short position on the S&P 500 on the order of about 15,450 contracts. The trade dripped into the market over the course of roughly an hour and a quarter, strike of 1995. Average fill price seemed to be around $133.

More info here: http://cnb.cx/QhrpNy

Extremely interesting, explains quite a bit of what was going on today. Whoever took this position is seemingly convinced that a large drop is coming - this isn't exactly a small bet. When you think about who can afford to take a position like this, you realize that there's a chance they might be right. The people in that group know a thing or two.

Now, this could simply be a statement, designed exactly to scare the market into position for whoever did this. But I have a hard time thinking that's the case. Given that it was dispersed fairly well and over a longer period of time, I have to imagine that it wasn't designed to be visible - not right away at least. I feel like this is a fairly serious bet, and it was not placed lightly.

So what do you think? Do you see a collapse coming? The big B word is thrown around nearly every time I read an article or a tweet having anything to do with the market - and perhaps with recent Fed announcements, we might actually start to see some of those fears realized. Whether or not it's due to rational expectations is another matter. However, this is quite a unique period for the market, and one wonders how long this roller coaster can rise before it's time to drop. Things like this definitely put many on notice. I'm very interested to see what happens. I don't tend to think that the Great Correction is necessarily coming, but given the current state of world events, I think it's pretty hard to make any sort of concrete bet. Although someone did today.

Thoughts?

 
Best Response

yeah, hard to say, but I'm starting to get that uneasy feeling...some smart people are selling now. I've been putting some trailing stops on some of my big winners to take some off that table and get more into cash, but I'm still way net long.

Rather than sell or buy heavy and overreact at every 2% move up or down, I tend to ride the waves and lazily buy and sell...usually is a good recipe since I'm too dumb to be ahead of the curve and just usually smart enough to take some my winners and get more in cash before the market turns south...

At least that's what I tell myself. I've ridden this nice wave up since 2009, no harm in taking a bit off the table now and waiting for some panic to buy again.

 

I like that way of thinking. Honestly that's more or less what I've been doing. I don't have the resources to investigate every little movement, and I learned a while ago that you can't freak out when someone decides to move the market against you one day and drops your PnL 5% in a day.

I'm way long as well, one short position. Overweight in tech, although I feel comfortable with that because I see events happen pretty quickly in that space. Took advantage of the big dip on Monday, although not a big enough advantage. Today's shenanigans erased all that, but I'm not worried as there is no fundamental reason for them to hit resistance going back up. People freak out, things get over-sold, that's when I like to swoop in and buy. Worked pretty well so far I have to say. And it doesn't require too terribly much effort.

I love panics - best time to jump in.

"When you stop striving for perfection, you might as well be dead."
 

yeah, would just be careful to think that there is "no fundamental reason they would hit resistance" -- the fundamentals actually give a very good reason why they should not go any higher (especially when you are talking about names like FB, Twitter, etc). I'd argue names like that and even one of my holdings, LinkedIn, are a bit overextended and in a market correction, those could easily drop dramatically (50%+)...

 

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"When you stop striving for perfection, you might as well be dead."

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