How much holiday cheer is too much? Investor enthusiasm on stocks running high into year-end

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Michael Santoli breaks down the jump in investor spirits that's caused them to run for riskier assets and stocks like bitcoin and MicroStrategy.

Is it possible to be too merry and bright heading into the holiday season? The question is timely, given the unmistakable upwelling of investor enthusiasm toward equities in recent weeks and a reignited impulse by traders to grab for the raciest assets. The trick, though, comes in trying to distinguish between a bull market feeding off rational fundamental positives and one that has grown so frisky as to be acutely risky.

Those converts are a way for the company to get paid for the volatility of its stock by hedge funds, who use arbitrage strategies to play the embedded options in the convertibles. And on top of all that, leveraged ETFs on MicroStrategy stock itself then have to hedge around the daily price moves. These are among the most heavily traded instruments in the market .

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 /  🏆 12. in PT
 

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