Behind the Markets Podcast · Friday, July 31, 2026
Michael discusses the significant market action involving AI trades, particularly mentioning Citadel's unwinding of leveraged positions. He explains that the volatility seen in July was driven by a mix of de-risking and deleveraging by hedge funds, impacting sectors like memory chip stocks.
“Yeah, thanks Jeremy. Um, so this month was really a lot in terms of, uh, a bit of a mix of de-risking and de-geosing on the hedge fund front. And we also saw what happened in Korea with the memory names.”
“So those were really aggressive moves. And most of them come from, like, a leverage kind of position. First, it was a lot of retail back there in Korea.”
“Um, and also what you, um, mentioned about situational awareness, which is not necessarily is the AI trade is gone and if it's like Fed or whatnot, it's more an issue of, um, leverage and risk management.”