{"id":1548844,"date":"2025-07-24T17:45:00","date_gmt":"2025-07-24T21:45:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1548844"},"modified":"2025-07-24T17:45:00","modified_gmt":"2025-07-24T21:45:00","slug":"on-crashing-in-the-absence-of-an-actual-market","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/on-crashing-in-the-absence-of-an-actual-market\/1548844\/","title":{"rendered":"On Crashing In The Absence Of An Actual Market"},"content":{"rendered":"

On Crashing In The Absence Of An Actual Market<\/span><\/p>\n

\n

Submitted by QTR’s Fringe Finance<\/a><\/em><\/p>\n

In case you\u2019ve missed it, meme stock mania has made a bit of a resurgence here in 2025, with names like OPEN and KSS squeezing higher for what appears to be no reason at all. Zero Hedge did a great wrap up of the gamma squeeze in OPEN\u00a0here<\/a>.<\/p>\n

<\/a><\/p>\n

The way these speculative meme cauldron-bubbles pop up is often reported by the media as fun and harmless.<\/p>\n

\u201cThose pesky Reddit traders are at it again,\u201d<\/em>\u00a0some lobotomized newscaster will say, smiling about the fact that a company burning tons of cash is up 500% in three days for no reason.<\/p>\n

But what they fail to point out is that such massive squeezes higher for no reason \u2014 happening for the first time in history over the last half decade \u2014 are a result of people weaponizing options gamma and a pervasive streak of unsophisticated investors entering the market.<\/p>\n

These are symptoms that the market is sick \u2014 not that it’s working the way it\u2019s supposed to.<\/strong><\/p>\n

It seems hilarious to think about, but look back on your own life \u2014 how many times have you argued with people about the efficient market hypothesis? How many man-hours have been wasted discussing whether or not the market is liquid, robust, and sophisticated enough to find fair prices for equities all day, every day?<\/p>\n

This was argued because at one point, markets were functioning somewhat normally. Today, thanks to options and the passive bid, it isn\u2019t. The market is Charlie Sheen in the midst of a manic episode during a nationally televised interview. I dare you to show me the difference between \u201cI have tiger blood\u201d and markets moving higher on the bullshit excuse of \u201canimal spirits\u201d. And the difference between \u201cI\u2019m not bi-polar, I\u2019m bi-winning\u201d and \u201cwho cares about fundamentals, stock price bro!\u201d<\/p>\n<\/p>\n

The meme stock phenomenon is the opposite of a functioning market: it\u2019s the market\u00a0purposefully<\/em>\u00a0distorting prices because a bunch of teenagers are standing around bored \u2014 like it\u2019s Friday night at the mall \u2014 sitting on their trading apps with nothing else to do but stir up trouble.<\/p>\n

And don\u2019t get me wrong. I don\u2019t think they\u2019re wrong for this. Hell,\u00a0I\u2019ve discussed publicly how I think the GameStop gamma squeeze was a great way to expose just how flawed the system was<\/a>\u00a0\u2014 and I\u2019ve also said I was happy to see it take place, because for me, any short burst of volatility in the market is fun to bear witness to.<\/p>\n

Traders have the right to bid up worthless assets as much and as often as they like\u2026 I don\u2019t have any problem with that. But it should be giving us insight into how the rest of the market is functioning. It\u2019s not people going in and buying Kohl\u2019s equity or OPEN equity that are driving these stocks higher\u2026 It\u2019s market makers hedging an obscene amount of call options in both names that\u2019s fueling the move.<\/p>\n

I\u2019ve been arguing over the last couple of years that there are two main ways the tail is wagging the market dog:<\/p>\n

The passive bid \u2014 which\u00a0I described last week and explained how it could result in a giant market crash<\/a>\u00a0the likes of which none of us are expecting.<\/p>\n

Weaponized options gamma<\/p>\n

Between these two forces, the stock market likely hasn\u2019t had a legitimate bid in years.<\/strong><\/p>\n

You thought market breadth was a problem? You thought a couple of stocks driving a single index higher was an issue? Wait until we have a passive bid unwind, or we see a monster gamma squeeze flip violently into a monster gamma crash \u2014 when\u00a0puts<\/em>\u00a0become the weapon of choice instead of\u00a0calls<\/em>.<\/p>\n

\ud83d\udd25<\/strong>\u00a060% OFF IF YOU SUBSCRIBE TODAY:<\/strong>\u00a0Anyone who subscribes annually gets 60% off full price of QTR’s Fringe Finance\u00a0<\/em>for as long as you remain a subscriber:\u00a0<\/strong>Get 60% off forever<\/a><\/p>\n

Only then will market participants and news anchors look dumbfounded at each other, point to charts on the screen, and ask each other where it all went wrong.<\/p>\n

But I\u2019m telling you right now where it\u2019s going wrong\u00a0as it\u2019s happening<\/em>: the passive bid and options gamma are driving this market higher. Again, we probably haven\u2019t had a legitimate bid in the stock market in years.<\/p>\n

They work hand-in-hand, with option dealers violently moving prices higher, and then the passive bid coming in to act as though there was genuine demand for that equity at that price all along \u2014 when there wasn\u2019t.<\/p>\n

As I wrote about\u00a0this morning<\/a>, valuations and consumer health don\u2019t seem to make sense or gel with how the market is performing today. There\u2019s a very short list of reasons why the market could be perpetually at all time highs now. At the top of that list, I would put the passive bid and gamma squeezes as the main culprits.<\/p>\n

Of course, no one will talk about this until it creates some type of catastrophic situation that puts Congress\u2019s 401(k)s at risk \u2014 which is when they\u2019ll start paying attention. If you layer crypto into the equation \u2014 and then gamma squeezes on crypto names, plus passive bid buying of crypto names as well, before a crash in crypto \u2014 then you have a third horseman of hell, ready, willing, and able to potentially usher in an apocalypse.<\/p>\n

And as my subscriber, you get the benefit of me being \u201cwrong\u201d all the time \u2014 when the fact of the matter is, I may just be early. So save this post, and let\u2019s see if we wind up revisiting it at some point in the future, when the \u201cactual\u201d market analysts and the \u201creal professionals\u201d are out of ideas and looking for an explanation the charred wreckage of a market that sits smoldering behind them.<\/p>\n

<\/a><\/p>\n

QTR\u2019s Disclaimer<\/strong><\/em>:<\/strong>\u00a0Please read my full legal disclaimer\u00a0on my About page here<\/a><\/em>.\u00a0This post represents my opinions only.<\/em>\u00a0In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a\u00a0Creative Commons license<\/a>\u00a0with my best effort to uphold what the license asks, or with the permission of the author.<\/em><\/p>\n

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade\/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I\u2019m bullish without owning things, sometimes I\u2019m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I\u2019m long I could quickly be short and vice versa. I won\u2019t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.<\/em><\/p>\n

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can\u2019t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I\u2019m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it\u2019s that important.<\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nThu, 07\/24\/2025 – 13:45<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/crashing-absence-actual-market<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

On Crashing In The Absence Of An Actual Market Submitted by QTR’s Fringe Finance In case you\u2019ve missed it, meme stock mania has made a…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1548844","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1548844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1548844"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1548844\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1548844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1548844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1548844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}