Tens of millions of dollars in options trades linked to the biggest American technology companies have again surfaced in US markets, weeks after the Japanese conglomerate SoftBank Group was linked to similar wagers.
Amazon.com, Facebook and Netflix were among companies that saw block trades of call contracts on Thursday, representing speculation on movements in their shares through the first months of next year. Call options are bullish bets by themselves but can also be paired with other positions as part of a hedge.
The identity of the buyer wasn’t known. Analysts noted a resemblance to a series of wagers made by SoftBank over the summer, which entailed billions of dollars of call purchases in tech stocks. Those “Nasdaq whale” wagers — combined with an explosion in buying by inpiduals and day traders in short-dated options —were theorised by some analysts to have created a bullish feedback loop that contributed to the August rally in the Nasdaq 100.
“The structure of the trades combined with the timing certainly has a lot of investors speculating the Nasdaq whale is back in the marketplace today,” said Chris Murphy, derivatives strategist at Susquehanna Financial Group.
On Thursday, a combined $74.5 million worth of Amazon call options expiring in January and March changed hands, pided between two block trades. Almost $52 million worth of bullish Facebook options expiring in the same months traded in two transactions. Roughly $25 million was spent on similarly dated Netflix calls in two blocks, while $28.4 million worth of Alphabet bullish bets crossed in two trades.
“The pattern of these trades are very similar to that of those widely discussed in August, including the companies targeted, the sizes and maturities, and the delta neutral execution,” said Benn Eifert, CIO, QVR Advisors.