The entire stock market has been in shambles over the past trading sessions, and ever since the last FED meeting where Jerome Powell raised rates another 75 basis points and was rather hawkish the market is digesting this with more downside in the foreseeable future. Could some of the over leveraged hedge funds be margin called in the up-and-coming trading sessions? Traders seem to think so.
RECORD NUMBER OF PUT OPTIONS
One of the many indicators that showcase a bearish stock market can be found in the option trading data. And per Bloomberg: “More than 33 million bearish contracts changed hands Friday across the board, the busiest session since data began in 1992. The largest exchange-traded fund tracking the S&P 500 (ticker SPY) also saw volume in puts spike to an all-time high after a week of central bank-induced volatility in everything from equities and bonds to currencies. ” (Source Bloomberg)
Fear is clearly heading toward and all time high as more traders are betting that the prices of assets are going to head down farther in in short or long term from here. We could see a historical crash from even these already low levels, but only time will tell.