Reuters
- After being identified as the “whale” behind a series of option trades in technology stocks earlier this month, the SoftBank Group is now reconsidering its strategy, Bloomberg reported on Friday.
- The firm met with investors to explain that its option trading strategy is somewhat conservative and is only in blue-chip tech stocks.
- SoftBank employed a strategy of buying out-of-the-money call options on tech stocks, and selling even higher priced calls on the same names, according to the report.
- Here are the seven technology stocks SoftBank piled into via call options, according to the report.
- Visit the Business Insider homepage for more stories.
After being identified as the “whale” behind a series of large options trades that raised eyebrows among investors earlier this month, the SoftBank Group is reconsidering its strategy, Bloomberg first reported.
The Japan-based tech conglomerate told investors that its multi-billion dollar bet on tech stocks is relatively conservative given that it is concentrated in a small group of blue-chip tech stocks.
The firm employed a call spread strategy: buying out-of-the-money call options on a stock, and then selling even higher-priced out-of-the-money call options to collect the premium. This type of strategy caps upside potential, while the premium collected from selling call options helps lessen the downside potential.
Now, SoftBank is reconsidering the trades and trying to reassure its investors after it experienced a near $10 billion decline in market value after it was identified as the options whale.
Here are the seven technology stocks SoftBank piled into via call options, according to the report.
1. Amazon
Ticker: AMZN
Market cap: $1.6 trillion
2. Adobe
Ticker: ADBE
Market cap: $231.7 billion
3. Alphabet
Ticker: GOOGL/GOOG
Market cap: $1.04 trillion
4. Netflix
Ticker: NFLX
Market cap: $213.4 billion
Ticker: CRM
Market cap: $224.3 billion
6. Microsoft
Ticker: MSFT
Market cap: $1.53 trillion
7. Facebook
Ticker: FB
Market cap: $768.6 billion