by fickdichdock
Reasoning in some easy to digest bullet points:
- Hedge funds piled into regional banks in the last crash but they will take profits on the first sign of trouble.
- Fitch “in ur an us” rating agency down graded the US recently. Rumors of more extensive bank downgrades.
- Biggest -% day for many regional banks since they ultra crashed last time due to the news above
- IV still low despite all of this. Puts on these regional banks are so cheap lotto tickets at the moment that any kind of volatility up tick will send them 100%+
- Burry sold most of his regional bank bets and went full regard with puts.
Related:
Fitch warns it may be forced to downgrade dozens of banks, including JPMorgan Chase
It takes 12-18 months for equity markets to reflect rate hikes fully. 15 months of 11 almost consecutive interest rate hikes. Including the largest 6 month increase in 41 years. Are we just starting to observe the effects? “Historical observation has shown that stock prices and interest rates have
h/t theSilverVigilante