Home Capital Right Timing

Safer to err on the side of caution as STI's support appears precarious

The Edge Singapore
The Edge Singapore 1/29/2021 6:30 AM GMT+08  • 3 min read
Safer to err on the side of caution as STI's support appears precarious
With the STI testing a weak support, traders should stay cautious as volatility sets in overseas.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

On Jan 27, the Chicago Board Options Exchange Volatility Index (VIX) shot up to 37, its highest level since 40, which it attained at the end of October last year. The volatility in the US markets was triggered by a surge in the price of American video game retailer GameStop.

As a result, hedge funds that bet against the stock had to close their positions. Retail investors on online platform Reddit — and spurred on by Elon Musk, the major shareholder of Tesla — got together to shore up GameStop’s price.

It is uncertain where this ends as market watchers attempt to divine if hedge funds — which held short positions in GameStop — are negatively affected. If hedge funds used options strategies to limit losses in their short-selling, then the downside is likely to be limited. That would mean that markets could resume some form of a rally next month.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.