A quick mini-rant. Every time the market drops by more than 1% two or three days in a row, or anything weird happens in the market, you’ll inevitably hear about a pod blowing up. This normally comes from a few dozen twitter accounts tweeting “hearing a pod is blowing up,” but it comes in other forms (i.e. it could be twitter accounts just tweeting, “did a pod just blow up?” or you’ll get a bunch of panicked texts / Bloomberg messages from people speculating on / asking about if a pod is blowing up).
Obviously, you are correct. But if we replace "blowing up" with "unwinding in a forced, but non-panic-ed fashion" I think it is frequently correct and does explain a lot of the dynamics seen over past decade. Factor volatility and who-has-same-positions-volatility has become more important than simple market exposure. The times when I make (or lose) money on both sides of my book on no news are too numerous to count. And to my mind, the most important factor has become who-has-same/opposite-positions factor.
Obviously, you are correct. But if we replace "blowing up" with "unwinding in a forced, but non-panic-ed fashion" I think it is frequently correct and does explain a lot of the dynamics seen over past decade. Factor volatility and who-has-same-positions-volatility has become more important than simple market exposure. The times when I make (or lose) money on both sides of my book on no news are too numerous to count. And to my mind, the most important factor has become who-has-same/opposite-positions factor.
sorry to be so naive, but can someone let me know what exactly a "pod" is?