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Quant Stock Trades Are Breaking Away From Bonds

(Bloomberg) All through the pandemic era and its aftermath, Jerome Powell lived rent-free in the heads of Wall Street stock traders.Most Read from BloombergHuawei Is Building a Secret Network for Chips, Trade Group WarnsMusk Told Pentagon He Spoke to Putin Directly, New Yorker SaysGoldman Is Cracking Down on Employees That Aren't in Office Five Days a WeekIndia First to Land Near Moon South Pole After Russia FailsS&P 500 Up 1% as Yields Slide Amid Fed Pause Bets: Markets WrapAs he cut interes ....

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​Analysis: Outperformance brings factor investing back in favour

​Analysis: Outperformance brings factor investing back in favour
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Do Markets Burst in The Same Direction in the Last Half Hour of Trading?


Traders Magazine
By Guido Baltussen, Robeco Asset Management 
In the last week of February 2020, as coronavirus surged, the U.S. stock market crashed by more than 10%, signaling the beginning of the COVID-19 recession. Market volatility rose, with the CBOE Volatility Index surpassing 82, its highest end of day closing, on March 16, 2020.
One major factor contributing to this increase in volatility was hedging by traders with short gamma positions. Gamma measures how much the price of a derivative accelerates when the underlying security price moves. Market makers in products with gamma exposure, such as options and leveraged ETFs, are commonly net short these products. As a result, they have to buy additional securities when prices are rising, and sell when prices are falling to help to ensure their positions are neutral even as the value of the underlying changes. Similar hedging activities have been carried out by other market participants, such as with dynam ....

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