Meanwhile, the AMG data came out this morning and, surprisingly, we saw $2.2 billion in outflows. With the recent action, one would think money was coming into the marketplace-not leaving. Clearly, there has been a rotation within the market (into high beta stocks), but one would think that the tank must be filled with fresh gas at a point. I don't think this factoid is actionable, mind you, I just thought it was interesting.
For the option players among you, part of my desire to buy volatility is also a function the flow we've seen of late. Professionals have been shorting "vol" pretty aggressively and my sense is that the street is trading negative gamma. If you don't understand what I'm talking about, suffice to say that if the street is set up this way, the action (both ways) will be exacerbated into December expiration. No worries, option newbies...the University of Minyanville will be offering derivative classes free of charge when the new session begins. Wait till you see the Professor!
Let me jump, Mon frere...I'll be back.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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