SoftBank is the “Nasdaq whale” that has bought billions of dollars’ worth of U.S. equity derivatives in a series of trades that stoked the fevered rally in Big tTech stocks before a sharp pullback on Thursday and Friday, according to people familiar with the matter.
The aggressive move into the options market marks a new chapter for the investment powerhouse, which in recent years has made huge bets on privately held technology start-ups through its $100-billion Vision Fund. After the coronavirus market tumult hit those bets, the company established an asset management unit for public investments using capital contributed by its founder, Masayoshi Son.
One person familiar with SoftBank’s trades said it was “gobbling up” options on a scale that was even making some people within the organization nervous. “People are caught with their pants down, massively short. This can continue. The whale is still hungry.”The Nasdaq was at one point on Friday down 10% from its peak — the common definition of a correction — yet the options boom means that the U.S.
The size and aggressiveness of the mysterious call buyer, coupled with the summer trading lull, have been a big factor in the buoyant performance of many Big Tech names as well as the broader U.S. stock market, according to McElligott. This week, he warned that dynamics around options meant the heavy purchases forced banks on the other side of the trades to hedge themselves by buying stocks, in a “classic ‘tail wags the dog’ feedback loop.
kuku27 Trouble brewing
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