https://finance.yahoo.com/news/look-options-market-signs-stock-200536548.html?fr=sycsrp_catchallLook to the Options Market for Signs of Stock Market TroubleBold added by me."Twice in the past six sessions the (S&P) index’s futures erased a 0.9% gain, the first time that’s happened since February.
While uncertainty about the economy and central bank policy was one instigator, something else may be contributing to the volatility:
Market makers repositioning their exposures. There’s evidence that these Wall Street dealers — with the capacity to move millions of shares to hedge their books — have shifted to a posture where their selling has the potential to exacerbate market swings.
Any turbulence is likely to be temporary and betting against price swings remains a popular trade. But this change in dealer positioning is a departure from the first seven months of the year when the cohort played a major role curbing price swings, according to a model kept by Goldman Sachs Group Inc.’s managing director Scott Rubner.
“
Market moves are exacerbated, and
no longer muted,” Rubner, who has studied flow of funds for two decades, wrote in a note Thursday. “
This is new.” "
