Morgan Stanley Quants: “We Are On The Verge Of Triggering Billions In Forced Selling”

While the hawkish Fed has shaken the market, an even bigger bogeyman lurks in the shadows: according to Morgan Stanley’s head of Quant and Derivatives Services, Chris Metli, the point of activating significant forced selling is getting much closer.

In a note from the QDS group, Metli writes that while option dealers were long $10bn in gamma just a few days ago that has now slipped to long $4bn in gross gamma.