💥 Zen and the Art of Blowing Up Hedge Funds

Good morning. Year to date, a number of hedge funds have gotten into trouble. There's Melvin..

It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Year to date, a number of hedge funds have gotten into trouble. There's Melvin Capital, which was overly short shares of GameStop (GME). The short squeeze only ended when market makers shut off the ability of retail traders to buy more shares. More recently, the hedge fund Archegos caused several stocks to get cut in half as they received a margin call. The issue isn't being right or wrong in a trade… it's the size. At a time when it's cheap to borrow money and lever up, a small move against a highly leveraged position can blow up a fund and lead to some moves that resonate throughout the entire market. That's the current paradox of liquidity. There's no simple solution, only a few guidelines. Traders should avoid excess liquidity on any one position and look to limit the size of their portfolio in any one trade. That can substantially reduce the risk of a big personal loss and ensure that hedge fund blowups don't become theirs. Now here's the rest of the news: Sponsored Content BREAKING NEWS Two Legendary Energy Explorers Could Have Found One of the World's Greatest Lithium Discoveries. You'll be astonished by what 7 Million Tons is worth. MARKETS DOW 33,153.94 +0.52% S&P 4,019.83 +1.18% NASDAQ 13,480.11 +1.76% *As of market close • Stocks shot higher on Thursday, with the S&P 500 topping 4,000 for the first time. • Oil rose 3.5 percent, last trading at $61.21. • Gold rallied 0.9 percent, changing hands at $1,730 per ounce. • Cryptocurrencies trended higher, with Bitcoin last at $59,270. Today's TOP TIPS Here's What to Do as Apple Rallies on the iCar Rumor Apple (AAPL) is one of the greatest performing stocks of all time. However, the company has often shifted between rapid innovations of new products and spending years without any significant new products. The past few years have seen few new developments, as the company has focused on annual upgrades to existing technologies. However, that hasn't stopped rumors from starting about various new products. The latest rumor? An Apple-branded car. » FULL STORY Insider Trading Report: Oracle (ORCL) Alison Fairhead, a director at Oracle (ORCL), recently bought 10,242 shares. The buy came to just under $690,000 and increased her holdings by 173 percent. Insiders are typically overwhelmingly sellers at the company, as to be expected from a big cap tech company. Over the past three years, the only other insider buys occurred in March 2020, right at the bottom of the pandemic selloff. » FULL STORY Unusual Options Activity: Under Armour (UA) Shares of Under Armour (UA) have been rallying the past few months but have stalled out in recent weeks. One trader is making a big bet on a move higher. That's based on the April 16th $18.50 calls. The at-the-money trade has just two weeks until expiration. Yet over 35,760 contracts traded, a staggering 270-fold rise in volume from the prior open interest of 132 contracts. » FULL STORY IN OTHER NEWS • Factory Production Soars on Growing Global Economy U.S. factory production and product sales hit a reading of 64.7 last month, the highest level in decades. Any reading over 50 indicates an expansion. The rise in factory activity comes from rising demand across nearly all industries. Factory readings in the Eurozone also suggest the biggest moves higher in nearly two decades. • Jobless Claims Hit 719,000 Jobless claims came in at 719,000, higher than the expected reading of 675,000. It's a sizeable jump over the prior week's reading of 658,000. However, total benefits are declining as well as continuing claims, which suggests that the job market continues to recover. The pace of job growth has still picked up since the winter. • New York State Legalizes Recreational Cannabis One of the most populous states, New York has now legalized cannabis. Estimates are that legal pot could create up to $20 billion in economic activity, which would also fill state pockets with tax revenues. The move also puts more pressure on other states to open up their markets to legal cannabis. The space fared well during the pandemic, as medical cannabis was declared an essential business. • Price Hikes Signal Inflation is Here A number of companies are starting to quietly hike prices Kimberly-Clark (KMB), the maker of Kleenex, toilet paper and diapers, is hiking selling prices. The company is citing rising commodity prices. Given the rise in lumber, pulp, and other inputs for paper goods, it's clear that the company expects prices for those inputs to remain elevated for some time. • Microsoft Wins $22 Billion Army Contract Tech giant Microsoft (MSFT) will outfit the U.S. Army with 120,000 AR headsets. The devices will create an Integrated Visual Augmentation System (IVAS). This provides enhanced data and situational awareness, as well as the ability to share this data as needed. The deal moves the tech from a prototype and out into the field. S&P 500 MOVERS TOP FANG 10.518% MRO 10.393% XEC 8.469% DVN 7.552% LRCX 7.402% BOTTOM KMX 7.048% PVH 4.466% M 2.903% RL 2.615% DVA 2.162% Quote of the Day The pandemic showed that leverage of some hedge funds can amplify stresses, too. This council used to have a hedge fund working group, and as of today we have one again. We're establishing the working group so that we can better share data, identify risks and work to strengthen our financial system. - Treasury Secretary Janet Yellen, speaking about the role of the Financial Stability Oversight Council, which is being reformed after family office Archegos caused a major market disruption in media and internet stocks. Sponsored Content Elon Musk Picking Winners? Lithium is Tesla's life blood and China is strangling its supply. That's why Elon Musk could be eying a Nevada lithium mine that's just 188 miles from his Gigafactory – same day delivery! Discover why this has the superb potential to be 2021's best investment. Not sure the best way to get started? Follow these simple steps to hit the ground running. › Step #1 - Get These FREE Reports: Warren Buffett's Top 5 Stocks | 10 Great Stocks Under $10 | 7 High Yield Dividend Stocks › Step #2 - Join Our Premium Advisory: The Next Superstock › Step #3 - Claim Your Free Copy Of: Big Book Of Chart Patterns | How to Trade Weekly Options For Weekly Income Nothing in this email should be considered personalized financial advice. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions. As defined in the United States Securities Act of 1933 Section 27(a), as amended in the Securities Exchange Act of 1934 Section 21(e), statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

This email was sent to edwardlorilla1986.paxforex@blogger.com by editor@tradingtips.com TradingTips.com | 3435 Ocean Park Blvd. Suite 107-334 Santa Monica, CA 90405 Manage Subscriptions | report SPAM