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Semiconductor shorts pile on as winning trade reverses - CNBC
Investor summaryBearish
WSB discusses the bearish feedback loop in semiconductors (SMH) driven by put buyers and asks if traders are switching to puts.
Bear points
- Put buyers are forcing market makers to short the underlying or sell Nasdaq futures, creating a bearish feedback loop.
- Downside can be exacerbated by panic selling from money managers and retail traders.
SMH半导体
Post body
“Friday’s selloff was never going to be a one-hit wonder,” Don Kaufman, co-founder of TheoTrade, said by phone. “All these SMH put-buyers are going to force market-makers to short the stock or sell Nasdaq futures which creates a very similar feedback to loop to what was causing it to go higher, but the downside can be exacerbated when money managers or retail \[traders\] panic.”
Are you still hold Calls on Semi's, or moving to PUTS/Stock now?
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