/biz/ - Business & Finance

>>51226662
So there are hedge funds trading autocallables. These funds trade autocallables. They are like selling puts on stocks. But different type of options than Black Scholes Options.

Autocallables are basically options that aren't standard BSM options. Still based on strike prices, barriers, etc.

A lot of hedge funds in the stock market are trading autocallables that are akin to selling puts on stocks.

Now they have to hedge their autocallables. By doing things akin to buying puts on stocks.
>pic related - it's how funds hedge against autocallable positions.
> from: Trading Volatility - Colin Bennett - Chapter 5 - Light Exotics

Basically hedge funds have these meme derivative positions called autocallables on a bunch of high beta stocks and now they gotta hedge aka go short which means. The. Hidden. Tigers. Come. Out.

The. Equity Autocallable. Jihad Terror Cells..