Was the financial system de-leveraged post 2008, or just hushed up?
With the endless Yellen talk of rates that were zero, are zero and will soon below zero, is no wonder that 200 hedge funds are out of business, thousands of day traders are also out, leaving the medium and large interest rates swappers and option sellers to fight in the market place. One thing that has not been explained to the investment public is that selling a single option contract or any other option contraption creates a chain of events that may lay dormant until a price or time trigger is hit and then everything needs to be paired off and liquidated, which of course very often leads to margin calls. In addition, security brokers who are very hard pressed to generate income, many times will ignore the stack of spreads an active trader has been piling up, and since there is no oversight by SEC, in due time this becomes a financial time bomb that can be defused only by liquidating option positions. Is a such market junction in our coffee cup? Stand by.
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