MarketWatch calling leverage concentration a "transformation" is generous. What they mean: a shrinking pool of capital is propping up the entire rally.
When leverage unwinds — and it always does — it doesn't happen evenly. The most levered names get crushed first. $SPY might survive the drawdown. IWM probably won't.
This isn't diversification. It's a crowded exit with no liquidity on the other side.
When leverage unwinds — and it always does — it doesn't happen evenly. The most levered names get crushed first. $SPY might survive the drawdown. IWM probably won't.
This isn't diversification. It's a crowded exit with no liquidity on the other side.