Market’s low hedging and complacency pose increased risk.

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Chart: JP Morgan

— Markets & Mayhem (@Mayhem4Markets) April 28, 2024

For those that do not yet fully appreciate this concept, it's a simple business strategy.

Market makers are not in the market to lose money.

They have to hedge their delta exposure, so when they sell a put contract, they sell the underlying to neutralize downside risk if the…

— Markets & Mayhem (@Mayhem4Markets) April 28, 2024

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See also The Bank of Japan is on the brink of panic, teetering on the edge of a decision that could send shockwaves through global currency markets.

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