The Australian widowmaker trade

Posted: May 30, 2017 in Uncategorized

In the last week, since the regional banks got downgraded, the hedge funds put in place the so called widowmaker trade – shorting the banks.

It is called the widowmaker trades as a lot of hedge funds tried this trade and got burnt (so they shorted by then someone came in and rallied the bank and they had to cover their positions provoking a huge rally).

The Australian market is still 30% down respect to its peak at 6,574. So, much cheaper than the much loved US market (mainly as we have no IT).

I am not in love with banks, but the widowmaker trade will come again (and banks will rally).

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