Market Volatility and Algos

• The stock market is largely controlled by algorithmic trading from hedge funds using high leverage.
• These algorithms cause significant volatility as their reactions influence other market participants.
• Following the recent banking crisis, algorithms sold $41 billion of global equities, creating a ripple effect.
• Projections suggest these algorithms will sell another $160 billion if volatility remains low, potentially triggering further sell-offs.
• This highlights the risk of leverage in the current market environment, as the dominant trend is selling.