The inflation theme of the market continued on Wednesday, with long positions mainly concentrated in traditional cyclical sectors (aviation, energy industry, etc.), while put options were mainly concentrated in the market ETF and high-growth individual stock option chains.

United Continental Airlines (UAL.US) $, $Sands Group (LVS.US) $, $Boeing Co (BA.US) $, $Exxon Mobil Corp (XOM.US) $, $Onik (Vanca) (OKE.US) $And the target of the financial sector ($Wells Fargo & Co (WFC.US) $, $Bank of America Corporation (BAC.US) $, $Citigroup Inc (C.US) $There has been a continuous order flow of long call options in the upward trend for several weeks.

Emotionally

Recent market volatility has not had a significant impact on medium-term market sentiment, and so far, the sell-off has covered only half of the market.

On the hedge fund side, there has been some pullback in their overall exposure after their aggressive buying operations during the recent market correction (Reddit Air Force replenishment incident).

In addition to the continued efforts around the concept of economic restart, such as$Tektronix Resources Limited (TECK.US) $, $Amiris Inc. (AMRS.US) $In this way, there have also been some changes in the bulk of the small market. But Sister Hua believes that this situation may change eventually, because the market still has the risk of concussion and downside in the short term. In particular, if high-growth technology targets continue to be sold off by institutions, then institutional long exposures are likely to face the need to sell these profit targets to fill the margin exposure of their high-growth side layout. The market has always been resonant, that is, if market sentiment as a whole continues to fall with the index, no stock can avoid systemic risk, we will usher in a stage of bear market.

So when will the current concussion market end? We can only say that there is no comment. At present, the organization has not shown any interest in the extreme decline of high-growth technology companies.Only selectively intervened in the short-term intraday rebound opportunity.. However, we can also follow the trend at this stage from other clues, as shown in the following figure:

Generally speaking, when the uncertainty in the market is amplified, we tend to see that the trading volume of ETF (SPY QQQ, etc.) in the index market is relatively larger than the overall trading volume of the constituent stocks of the index. When market investors show optimism in the process of preparing for the bottom, the trading volume on one side of the index tends to decline (the overall trading volume of index components will be enlarged).

Then the above chart (QQQ liquidity trend) quantifies the trading volume of these ETF and its constituent stocks. In the chart, we can see that the current trading volume of ETF differs greatly from that of its constituent stocks, which will be regarded as a sign of a potential turning point in the market. The larger the proportion of ETF trading volume, is often a sign of high uncertainty in the market, and investors are more willing to avoid the risk of individual stocks and trade into large varieties, which usually means that the market may have to start a sharp downward trend. In contrast, at the bottom, the market has priced most of the uncertain events, and investors are beginning to be confident that the liquidity trend will gradually decline because investors generally think that there is no need to trade ETF and are more willing to take the risk of individual stocks. At present, we can see that the trend is still expanding, and given that the previous peak occurred in March last year (epidemic phase), it is still possible for the market to decline further.

March 3 ETF options change in the market

Trading volume in the options market reached 43.3 million contracts on Wednesday, the same as the previous average, with subscriptions slightly higher than the sell volume (13:8). The volume of individual stocks and ETF is relatively high, while the flow of futures index products is moderate.

Changes in individual stock options in various sectors on March 3

The most active plates includeFinancial, cyclical consumption and industrial sectors而Medical and public utilities sectorTrading volume is relatively calm.

Of the 3814 stocks with only listed options, 1596 (42 per cent) closed up and 2124 (56 per cent) closed down. Among the 500 stocks with the highest liquidity, 333 have higher implied volatility and 107 have lower implied volatility on the 30th. The stocks that have detected transaction changes include:$Bank of America Corporation (BAC.US) $, $Rocket Companies (RKT.US) $, $SOS Ltd (SOS.US) $, $UWM HLDGS CORP (UWMC.US) $和$Boeing Co (BA.US) $等。

Science and technology stock

Industrial stock

Cyclical consumer stock

Financial stocks

Communications Unit

Medical and Health Unit

Energy stocks

Real estate stock

Building Materials Unit

Defensive consumer stock