From: "Ens, Amanda" ale To: "jeffmy E." <[email protected]>, Richard Kahn S> Cc: "Rothbcrg, Justin D" Subject: Stock replace tech positions or overlay with Nasdaq put spreads Date: Fri, 09 Jun 2017 19:55:05 +0000 Attachments: GEVI_-_SPX_vol_dispersion_to_trade_a_bubble_in_tech.pdf Wine-Images: image002.jpg; imagc003.jpg; image004.jpg; image005.jpg; image006.jpg; imagc007.jpg; image008.jpg Would you like to revisit stock replacing AAPL with call options or hedging your tech longs with Nasdaq put spreads? As discussed earlier this week: How to detect and position for a potential Tech Bubble • Valuations, relative performance, and inflows data invoke echoes of the late '90s and suggest risk of an overshoot in (IS Tech (Chart 1 to 4) • However, lack of rising vol alongside stock prices - a classic sign of an asset bubble — signals still early stages of bubble formation (Chart 5-6) • Derivatives can be a key tool for trading bubbles, allowing investors to capture asset price upside while mitigating reversal risk • To this end, we like stock replacing FANG positions or overlaying Tech mg:inure with Nasdaq 100 lNINQ put spreads The last Instance where a single sector dominated SPX market cap as the Tech sector does now was the dotcom bubble era cyidiriutter.01.jpg'40102DESA.23537FTO Source: Bot*A Mani] l.)ach Globs! Research. ',tont)* data (mm Jan. MO to.lun.17 In May, the Nasdaq recorded its longest streak of monthly gains since 2009 (TA. However. compared to the only other instances of longer streaks ('86.95) the current bull run is still only half the size i;yitl:image001.jpsgOID2DESA2F537FRi Source: Soft. Mcmll l.)nch Global Research. Data from Sep-85 to 31-M:9, . 7 During the 2000s Tech Bubble, Tech vol rose with Tech stocks and broader market correlations fell as Tech stocks decoupled from other large caps-both classic signs of an asset bubble Growth has only been relatively more expensive vs. Value during the peak of the dotcom bubble