The FANG Whale is at it Again

The FANG Whale is at it Again

#FANG #NASDAQ #Whale #call options


An investor bought large blocks of Northside Call options in companies: Netflix Inc. and Inc., trades reminiscent of outsized options purchases made in August by a large investor known as the “Nasdaq Whale.”

The unknown investor purchased calls expiring in January and March for Netflix, Amazon, Facebook Inc. and Alphabet Inc. while selling shares of those companies.

The 4 companies are collectively known as the “FANG” group

Such a trade involving options allows an investor to rotate out of the stock, reduce exposure while maintaining the ability to benefit from future gains in stock prices.

In total, the investor paid a premium of about $180-M for the options, which have a notional value of roughly $1.7-B, according to my calculations.

Some market watchers have attributed similar large call purchases in tech-related names made in August to SoftBank Group Corp. Those institutional trades came during a flurry of Call buying driven by retail investors.

That action prompted September’s tech-driven sell-off in US stocks, as dealers who sold those Calls unwound the shares they had previously purchased to hedge against their Short options positions.

I cannot know who that Call buyer is, but I have a feeling it is SoftBank again,

SoftBank declined to comment.

Tech-related Call buying has continued, but it has cooled since early September.

Skew is a measure of demand for protective Put options relative to Northside Call options, it has recovered in :Alphabet, Amazon and Apple Inc.

The stock sales accompanying Thursday’s options purchases neutralize the overall market impact of the trade. And, given the prior “Nasdaq Whale” trades, they are unlikely to spur as much reaction from other investors again, and the impact is likely to be confined to options markets.

Have a healthy weekend, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.