This is an abridged version of our Daily Report.
Small traders become aggressive
The smallest of options traders have become remarkably aggressive in betting on a market rally.
Their volume of opening call purchases is nearing record highs, last seen in 2000 and 2007. They are spending more than 42% of their volume on buying calls, the most in more than a decade.
A bad few weeks for beans
Soybeans have lost more than 13% in a few weeks and closed at the lowest level since 2013.
That’s one of the largest losses since 1970, which has led to multi-week rebounds. Longer-term returns were mixed, and there are other headwinds like seasonality.
All in, and then some
Last week, active investment managers went to a leveraged long position in stocks. Sounds bad, but the Backtest Engine shows that over the next month, the S&P 500 rose 82% of the time after the other times managers were this aggressively long.
A week of small losses
The Dow Industrials have lost ground for the last 5 sessions, but no more than 0.5% each day. That has triggered 18 times since 1929.
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The post titled Small Options Traders Get Aggressive As Soybeans Fall was originally published as on SentimenTrader.com on 2018-06-19.
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