By: Dr K C Gupta, YBB Personal Finance

SENTIMENTS

AAII Bull-Bear Spread -8.3% (below average)
$NYA50R, NYSE %Above 50-dMA 58.23% (positive)
$SPXA50R, SP500 %Above 50-dMA 56.80% (positive)

ICI Fund Allocations (Cumulative), 6/30/25
OEFs & ETFs: Stocks 61.34%, Hybrids 4.14%, Bonds 17.47%, M-Mkt 17.05%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 9/17/25+ cut
FOMC 10/29/25+ cut

Treasury

T-Bills 3-mo yield 4.32%, 1-yr 3.93%; T-Notes 2-yr 3.76%, 5-yr 3.84%, 10-yr 4.27%; T-Bonds 30-yr 4.85%;
TIPS/Real yields 5-yr 1.38%, 10-yr 1.88%, 30-yr 2.57%
FRNs Index 4.209%
US Savings I-Bonds rate from 5/1/25 – 10/31/25 is 3.98% (previous 3.11%); the fixed rate is 1.10%, the semiannual inflation is 1.43%

For current banking rates, see www.depositaccounts.com/

Stable-Value (SV) Rates, 8/1/25
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.25%
TSP G Fund 4.375% (previous 4.25%).

Weekly ETFs INDA -1.14%, EPI -1.12%, INDH -1.16%, SPY +2.49%

The data above are as of Sunday preceding the publication date.

ECONOMY

India will have 25% US tariff plus 25% penalty for buying Russian oil on items not covered by other trade rules. Indian stocks have lagged since July. RBI (central bank) held rates at 5.5%.

IT/TECH

An agreement between Indian real-time payment system UPI (owned by NPCI) & US PayPal/PYPL (it also owns Venmo) will allow overseas e-commerce payments by Indians.

Sysdig (US) cloud security business is split 50-40-10 between the US, EMEA (Europe, Middle East, and Africa), & APJ (Asia Pacific and Japan). India represents 33.3% of its APJ business. Its approach is real-time, end-to-end cloud security.

SPECIAL TOPICS

Tata Motors is buying the commercial truck business (nondefense) of Italian Inveco. It will buy 27.1% interest from Excor (Agnelli family) & then make a tender offer for the rest. Tata & Agnelli family have other joint ventures (JVs). The defense business of Iveco will be spun off to another Italian company.

French Schneider Electric will buy the 35% remaining interest in Schneider Electric India from Singapore Temasek.

FMC-India will divest its agrichemicals commercial distribution business in India citing low demand & high inventories. It will keep supplying the new buyer from its manufacturing operations in India, US, etc. It will also keep its small R&D operation in India.

MEME STOCKS

The list of meme stocks is growing – KSS, DNUT, GPRO, OPEMN, GME, etc. They start rallying without any reason or rationale.

The term meme stock captures a lot of sophisticated trading strategies underneath. It’s a heavily shorted, low-liquidity stock that can be moved by options activity & social-media buzz that results in GAMMA-SQUEEZE, a special kind of short-squeeze.

First, stocks can be bought LONG or sold SHORT. Shorting requires borrowing a stock & then selling it. The short-seller hopes to buy it back later at a lower price. Losing an infinite amount in shorting if the stock rises instead is a tall-tale because the position or account will be liquidated after repeated unmet MARGIN calls. SHORT-SQUEEZE occurs when many short-sellers get into trouble due to rising margin requirements & their short positions may be liquidated involuntarily by their brokers.

Second, options are derivatives for underlying stocks, indexes or futures. DELTA is the change in the option price from $1 change in the price of the underlying security & has the range $0-1. Delta is 0 or low for deep-OTM (out-of-money) calls, 0.5 for ATM (at-the-money) calls & high or 1 for deep-ITM (in-the-money) calls.

Speculators often buy deep-OTM calls & these may be seen as lottery tickets; most expire worthless. Often, news leaks or insider trading are suspected when there are large or unusual deep-OTM call orders. As options dealers can lose a lot of money from unexpected news, they are aggressive in reporting any unusual options activity to regulators.

A highly profitable call may become deep-ITM & maybe ASSIGNED or the profits may just disappear in a volatile market. So, investors should take profit (& reduce risks) on deep-ITM calls & replace them with new OTM/ATM calls.

Options GAMMA is the rate of change of delta, or the 2nd derivative (or, curvature) of the option price wrt the price of underlying security. Gamma is the highest for ATM options (i.e. when delta is 0.5).

When you buy a call, the options dealer has to buy some underlying stock to hedge based on its “Greeks”. So, high options activity can move the underlying stocks.

Finally, to put it all together, the gamma-squeeze is when options speculators buy lots of ATM calls (i.e. with high-gamma) on heavily shorted, thin/illiquid meme stocks & simultaneously pump them in social-media or chat-rooms.

For more information, see https://ybbpersonalfinance.proboards.com/