📝Hedge Funds Unwind Single Stocks, Long Onlys Manage Tax-Loss Trade: UBS Strategy

Looking at our flows: No change looking at our High Touch flows. The desk was net for sale. Hedge Fund flows point at more unwind on the single-stock side while Long Onlys are actively managing the tax-loss trade - more so than in past years. Retail selling has dried up. I don't think they are done yet but the pause is helping. No sign of Risk Parity selling. CTAs have turned buyer and there is plenty of room to add if things run here. Buybacks are a week from coming back. Earnings were the clear focus in derivs flows this week, and it was interesting to see that the Meta-realized move marked somewhat of a shift in flows from clients this earnings season. Prior to Meta, earnings-implied moves had been inching higher and clients had been very hesitant to own options outright into prints, favoring spreads to cut down on cost. However, after Meta's outsized move, the flow saw a notable shift into Amazon and Apple with clients buying a majority of outright options.

- UBS Strategy