Bridgewater Bets $1.5 billion on Upcoming Market Drop
- Thread starter Baron
- Start date
It is not everyday ET’s founder starts a thread.
The probability of a disruptive political and or geopolitical event causing risk aversion seems high. Whatever Trump does with China - Hong Kong will have repercussions with US - China relations and domestic politics, or maybe both. Has not a lot of the market’s recent rise been on improved trade hopes?
There seems to be market confidence risk in the background if we get some negative economic reports. The Fed will probably be quick with increased liquidity on negative economic reports, however.
Risk seems high and reward potential seems low right now in equities.
Worth at least a hedge, I’d think.
The probability of a disruptive political and or geopolitical event causing risk aversion seems high. Whatever Trump does with China - Hong Kong will have repercussions with US - China relations and domestic politics, or maybe both. Has not a lot of the market’s recent rise been on improved trade hopes?
There seems to be market confidence risk in the background if we get some negative economic reports. The Fed will probably be quick with increased liquidity on negative economic reports, however.
Risk seems high and reward potential seems low right now in equities.
Worth at least a hedge, I’d think.
But it is only 1% of their capital. So it is a hedge, like in hedgefund.
News alert!: Hedgefund actually hedges!!!
Statement is true only if puts are way out of money minus the drop of his stock portfolio.
It says it’s a “wager, assembled over the past few months”.
So he might've asked several of his teams to assemble different wagers, which could include some put option combos. Not sure if wide OTM butterflies (including.broken wing) would make sense here.
March open interest may hold some clues.
Yeah, reading Bridgewater's press release carefully - the distinct impression is that they are skiddish and wanted some downside insurance on their portfolio. I doubt that they would only bet 1 percent of their capital on a naked bet if they were absolutely convinced...
Not a bad play IMO if you are long and worried about air pockets.
I think the secular bull has a ways to go yet, but internals on this rally are weak and it seems like folks have been front-running year-end seasonality. Seems like more of the same pattern from the past couple years: VIX positioning creates a pattern of vertical upside rallies and subsequent drops, but moves lower likewise get V-reversed as passive flows, short squeezes and the Fed come into play.
2020 is going to see concern about a Warren presidency among the stock-owning class, and with that in mind it's not clear if/when the indices can manage a sustained breakout.
I think the secular bull has a ways to go yet, but internals on this rally are weak and it seems like folks have been front-running year-end seasonality. Seems like more of the same pattern from the past couple years: VIX positioning creates a pattern of vertical upside rallies and subsequent drops, but moves lower likewise get V-reversed as passive flows, short squeezes and the Fed come into play.
2020 is going to see concern about a Warren presidency among the stock-owning class, and with that in mind it's not clear if/when the indices can manage a sustained breakout.
Dalio denies having a net negative market bet
https://www.zerohedge.com/markets/bridgewater-bets-15-billion-market-will-crash-march
Regardless, he is certainly not bullish
https://www.zerohedge.com/markets/bridgewater-bets-15-billion-market-will-crash-march
Regardless, he is certainly not bullish
Trade idea crowded already?