Hedge Fund Braced for Second Stock Market Plunge

[Bullitt]

Seems more anecdotal than evidence based than me. What is more important is what their holdings are, and that's something they will never tell you. Don't forget, it took buy-in from hedge funds to move this market higher. It wasn't all mom and pop buying the dip.

Hedge funds are getting ready for another slump in stock markets after growing uneasy that surging prices do not reflect the economic problems ahead.

Morgan Stanley said in a recent note that its hedge-fund clients hold a net short position of about $40bn in Euro Stoxx 50 futures. Global macro hedge funds have sharply reduced their exposures to stocks this year, according to JPMorgan Cazenove.

https://www.ft.com/content/e1e1c3ef-1849-46bc-a472-2af8c0aabe5b

The Commodity Futures Trading Commission's (CFTC) weekly Commitments of Traders (COT) report provides a breakdown of the net positions for "non-commercial" (speculative) traders in U.S. futures markets.

Right now, speculators are net short, same as they were in March.

 

[Bullitt]

Here's another one, except this one was up 449% on the year. I'd imagine downside protection is quite cheap right now.

A New York hedge fund that’s gained 449% in this year’s pandemic roller-coaster is betting on a new wave of volatility in the event Congress fails to extend a key bank provision in any new stimulus bill.

As time runs short on breaking the legislative impasse, Gammon Capital LLC has been loading up on bearish stock options to wager on the prospective market fallout.

https://www.bloomberg.com/news/arti...-449-is-betting-on-new-wave-of-market-turmoil