Re:Reddit’s profane, greedy traders are shaking up the stock...
by EpicEng on Wednesday February 26, 2020 @09:33PM
(#22429825)
>You haven't looked at the numbers. There's so much option trading that it affects the entire market a lot
The question is "what effect does have?", not "does option trading effect the market?"
Re:Reddit’s profane, greedy traders are shaking up the stock...
by H8crilA on Thursday February 27, 2020 @05:32AM
(#22432154)
That I cannot really tell you - I don't know.
The standard story is about delta hedging (i.e. the buyers are speculators that don't delta hedge, but the sellers do hedge, introducing a lot of gamma into the market, thereby amplifying moves).
My larger point is that in this state of the market one really has to wonder who's ultimately setting the prices.
https://themarketear.com/posts/cqKGhoO98L/image/0
Pair that with poor price discovery: few actively managed funds; shit-ton of indexation (both explicit and closet). We may, and I repeat - may, see some interesting action here. Legends like Michale Burry or David Einhorn often complain about price discovery. Which is even more strange given the fact that the number of publicly traded companies in the US was cut down in half since 1996.