Options traders are loading up on contracts that will jump in value should equities see a big drop
NEW YORK, July 12 (Reuters) – Options traders are taking advantage of muted U.S. stock market gyrations to load up on contracts that would jump in value should equities see a big drop, boosting the number of open contracts on Wall Street’s most popular volatility gauge near a record high.
The one-month moving average of open contracts on the Cboe Volatility Index (.VIX) hit 13.80 million on Wednesday, close to the record high of 13.85 million contracts logged in late June, according to Refinitiv data.
Its peaking?
Highest equity call/put ratio since the all time high. pic.twitter.com/9XL6it3E32
— Mac10 (@SuburbanDrone) July 13, 2023
I would point out that the average stock remains in a death cross on a weekly basis.
This signal has never failed to produce an S&P crash in 30 years. pic.twitter.com/lo48PaKv0w
— Mac10 (@SuburbanDrone) July 12, 2023
Q2 Earning season starts Friday. Banks gonna stink it up.
US banks spent the last several months competing with each other to keep or bring back depositors following the turmoil that took down three sizable regional institutions and triggered outflows across the banking system.
That scramble pushed rates on savings accounts to 5.05% at the end of the second quarter, according to Bankrate, their steepest level since February 2008.
The challenge for banks across the US is that these higher funding costs are eating into a key measure of profitability known as net interest margin, which measures the difference between what lenders make from their loans and what they pay for their deposits.
That will likely act as a drag on results for some banks in the quarter, especially the mid-sized regional institutions that ran into trouble last spring, while reducing estimates of what they can earn for the rest of the year.
Sadly, in markets, there is no strength in numbers. pic.twitter.com/g1lrSGOgDG
— Mac10 (@SuburbanDrone) July 13, 2023
This pattern will cause the maximum pain. pic.twitter.com/nhZH7GzxvQ
— Mac10 (@SuburbanDrone) July 12, 2023
Just give me a sign.
Any sign. pic.twitter.com/CrYBkQ7aEa
— Mac10 (@SuburbanDrone) July 12, 2023
The last time we saw this steep of a drop in 0DTE Equity Put/Call was right before the volatility spike event in April 2010 🧐 pic.twitter.com/bLLgLrxEQu
— Financelot (@FinanceLancelot) July 13, 2023
🙄 uh oh. Bank hanging on by a thread.
— Wall Street Silver (@WallStreetSilv) July 13, 2023