[9.19 Ice and Fire Island Strategy: After the 50 basis point rate cut, Powell played the master of balancing, the market outlook is still divided, and the seller strategy is dominant]
Last night, many traders fought all night and gained a lot of loneliness. The Federal Reserve cut interest rates by 50 basis points and hinted that there is still a possibility of a 50 basis point rate cut this year. However, Powell's next speech dampened the joy of traders.
Powell said that investors cannot assume that a 50 basis point rate cut is the new rhythm in the future. Data will drive monetary policy choices, and rate cuts will be accelerated, slowed down or paused as needed. To sum up, what he meant is that whether interest rates will be cut in the future or not, the data will have the final say, attitude is no attitude, plan is no plan, cross the river by feeling the stones, and everything will be seen.
U.S. stocks fell in response, rising and falling, and everyone stayed up all night to stay lonely. Bitcoin and Ethereum also fluctuated, showing that traders' opinions continued to differ.
At the close of last night, the S&P closed down 0.29% and the Dow closed down 0.25%, reporting 41503.10 points. The Nasdaq closed down 0.31%, the Russell closed up 0.04%, and the VIX panic index closed up 3.52%.
The Bitcoin ETF had a net outflow of 52.7 million, and the Ethereum ETF had a net outflow of 14.7 million. The volatility of the two rose slightly, but remained near the historical median.
Overall analysis shows that the strategy for this week and even this month is still mainly short volatility.
Suggestions:
On the one hand, you can continue to short forward volatility and maintain delta neutrality. It is recommended to sell the out-of-the-money delta20 position in December and buy October options for protection. The specific details have been posted in the community.
On the other hand, aggressive islanders can double sell cycle rights and use DDH tools to assist. In the DDH threshold setting, the unilateral total delta value can be used as the threshold for triggering hedging.
Before November, wide fluctuations will continue. Powell is worthy of being a master of balancing water. Data determines interest rates. He can both get rid of responsibility and manipulate the market. He is really a financial expert. It is worth learning from the next door.
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