‘Nasdaq whale’ resurfaces as Facebook and Amazon see options trading


Tens of millions of dollars in options trades linked to America’s biggest tech companies have surfaced again, weeks after Japanese conglomerate SoftBank Group Corp. has been linked to similar bets.

Amazon.com Inc., Facebook Inc. and Netflix Inc. were among the companies that saw bulk call contract trades on Thursday, representing speculation on their stock movements in the first few months of the market. next year. Call options are bullish bets in themselves, but can also be combined with other positions as part of a hedge.

The identity of the buyer was not known. Analysts have noted a resemblance to a series of bets made by SoftBank over the summer, which resulted in billions of dollars in sight purchases in tech stocks. These “Nasdaq whale” bets – combined with an explosion in buying by individuals and day traders in short-term options – were theorized by some analysts to have created a bullish feedback loop that contributed to the August rally in the Nasdaq 100.

“The transaction structure combined with the timing has certainly led many investors to believe that the Nasdaq whale is back in the market today,” said Chris Murphy, derivatives strategist at Susquehanna Financial Group LLP.

A SoftBank spokesperson did not immediately respond to a request for comment.

The latest trades come in the midst of another booming period for tech stocks. The Nasdaq 100 climbed 1.5% on Thursday and has advanced in seven of the last nine sessions, advancing nearly 6% over the period after falling into a correction earlier in September. The gauge is up 33% in 2020, an annual return that would rank among the best five of the past two decades.

The fact that software and internet stocks are said to rise so far in the year of a global pandemic and the accompanying global recession has prompted some analysts to seek alternative explanations for the gains. Some have speculated that frantic option buying by institutions and individuals – as well as subsequent purchases by large funds after SoftBank’s positions were discovered – boosted momentum by forcing dealers to buy stocks. as blankets. A day trading assault by new focus speculators has pushed the option volume of some stocks to their highest for decades.

SoftBank has considered revamping its trading strategy after betting on derivatives reportedly scared off some of its investors, people familiar with the matter told Bloomberg last month.

On Thursday, a combined value of $ 74.5 million of Amazon call options expiring in January and March changed hands, split between two bulk trades. Almost $ 52 million in bullish Facebook options expiring in the same months were traded in two trades. About $ 25 million was spent on similar date Netflix calls in two blocks, while Alphabet Inc.’s $ 28.4 million in bullish bets were crossed in two deals.

“The pattern of these deals is very similar to those that were widely discussed in August, including targeted companies, sizes and maturities, and delta neutral execution,” said Benn Eifert, chief investment officer of the hedge fund QVR Advisors.

This story was posted from an agency feed with no text editing. Only the title has been changed.

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