DISQUS

Distressed Volatility: UUP Call Volume Explodes, Trading Halts and Nov Call Options Double

  • the99th · 2 months ago
    After fading every crazy, volatile announcement this week and not collecting profits on those positions, I´d sure like to see the DX follow the ETF. Hell, we´re in an age where the derivative can lead the underlying, why not?
  • dvolatility · 2 months ago
    Ha, yeah and from what I remember in Jan/Feb, DX pierced through it's highs and failed while UUP was chillin under resistance the whole time. This time though the whole 100 mln pending issuance/premium to NAV issue is screwing everything up.. We'll see, it is interesting to see all of this volume in the ETF.
  • the99th · 2 months ago
    Its funny you mention that, I remember the DX and Gold were going up at the same time, which threw me for a loop for a few weeks. This ended effectively with the QE announcement and technically a few days after the DX made new highs.

    Correlation flips and basis widenings... hmmm. I smell a rat, but I happen to be preparing a rat souffle.

    I always say that ETFs are scams, and indices are scams, so index ETFs must be some kind of scam squared.
  • dvolatility · 2 months ago
    Yeah and sounds like the swap market is where the party's at! http://www.zerohedge.com/article/detailed-look-... When do CDS ETFs come out?
  • dvolatility · 2 months ago
    This is interesting: The Fantasy of the Clearing House Magic Bullet (http://www.nakedcapitalism.com/2009/11/the-fant...)
  • the99th · 2 months ago
    Aaaaaand its gone.

    Once CDS become exchange traded I might experiment with using them as an indicator or trading spreads between different contracts to hedge the basis of more conventional instruments like Currency Futures, but to trade as an underlying? I´d rather pay 50k a hectare for land in Argentina, and I ain´t doing that anytime soon.

    Clearing houses are quantum spaces just like anything else, just consider the amount of naked shorting via reciept delays that goes on in equities, supposedly the most basic market there is. With CDS the underlying problem is that there isn´t enough cash in existence to pay all the debt back with interest, much less to insure the debt, right? It doesn´t exist. To really have a clearing house for CDS you´d need to audit the Fed and if you did that the entire system would be shown insolvent so the clearing house would be somewhat obviated, not to mention, you know, commercial society as we know it. Get ready to plant some tomotoes come Spring.