In today’s briefing:
- Tax-Loss Selling In Australia 2024: Trade Reversed Is Tale of Two Hedges, Time To Unwind
- [IO Weekly 2024/32] Chinese Economic Sentiment Sours, Driving Iron Ore Lower; Option Activity Surges
Tax-Loss Selling In Australia 2024: Trade Reversed Is Tale of Two Hedges, Time To Unwind
- The theory is that stocks which are down hard FY-to-date by end-April end up being good sells because Australians will harvest their losses into end-June.
- The idea is then to buy those oversold names and hold them for 30-40 trading days. That has worked 10 out of the last 12 years hedged vs ASX200.
- This year, the “sold-down” list is very heavily weighted to miners. They have continued to fall since end-June so it’s down. But hedged vs a basket of miners? It’s up.
[IO Weekly 2024/32] Chinese Economic Sentiment Sours, Driving Iron Ore Lower; Option Activity Surges
- Iron Ore Price Decline: Iron ore prices dropped 1.7% in Week 32, driven by reduced steel output and fading demand. Stimulus-driven rally failed to sustain.
- Options Market Trends: Weekly options volume surged, with put volume increasing 106%, pushing the put/call ratio to 1.33, indicating bearish sentiment.
- Implied Volatility Shifts: Implied volatility (IV) surged midweek, particularly for September contracts, reflecting increased market uncertainty; options skew narrowed to just 0.3% suggesting more expensive calls.
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