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Whale of NASDAQ Closes More Large Options Trades

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A choices that are big which some market watchers call the “Nasdaq whale” unwound bets on a few technology-related companies on Friday after the sector’s recent sell-off.

The investor closed a position in a call that is bullish spread on Adobe Inc (O:ADBE) at a loss of roughly $200,000. The spread represented around $935 million of notional value. The phone call spread was originally bought on Aug. 5 among a blended group of trades that some market analysts have attributed to SoftBank Group Corp (T:9984).

Adobe shares ended 1.4% lower at $467.55 as U.S. stocks fell broadly.

The investor sold stock at the best time of the call spread purchase, then bought back the stocks after selling the options, at a loss of roughly $9 a share. Because the options trades were tied to stock, they had impact that is minimal market activity, unlike the sell-off earlier this month, said Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.

The trade marks the closure that is first the call spreads considered to be tied to SoftBank, and it could prompt conjecture on whether its “just a one-off or the beginning of a trend,” Murphy said. A choices that are big which some market watchers call the Nasdaq Whale.

Last week, an investor exited options that are large in names such as Facebook Inc (O:FB), Netflix Inc (O:NFLX) and Salesforce.com Inc (N:CRM), though those positions had structures that are different the call spreads tied to SoftBank.

Additionally on Friday, an investor closed call that is large positions in Alphabet Inc (O:GOOGL) and Amazon.com Inc (O:AMZN), noted Amy Wu Silverman, equity derivatives strategist at RBC Capital Markets. Alphabet shares fell 2.4% and Amazon shares dipped 1.8%, both underperforming the S&P 500 index (SPX), which declined 1.1%.

“These ‘whale’ tech unwinds continue to influence sentiment and put pressure on the FANG names,” Wu Silverman penned in an email, referring to the group of leading tech-related stocks Facebook that is including, Netflix and Alphabet.

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Justin N. Richards

Justin N. Richards is a Florida-based technical analyst, market researcher, educator, and trader. Justin began his career in Chicago in 2001 performing futures market analysis for floor traders at the Chicago Board of Trade and the Chicago Mercantile Exchange. He also worked for numerous brokerage firms during that time, all of which hold him in high regard, and he has been providing outstanding analysis services for traders worldwide ever since. Mr. Richards is an expert in the area of market patterns, price and time analysis as it applies to futures, Forex, and stocks. In addition to these talents, he provides educational services for investors looking to improve their analysis and trade skills. Justin has a B.A. in Business Administration from UCLA and an M.S. in Financial Markets and Trading from the Illinois Institute of Technology. Justin’s professional experience, education, and discipline, not only make him an exceptional analyst, they point him out as a reliable, hard working and intelligent business strategist who is dedicated to his craft.
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