Gavin Baker+ Your Authors @GavinSBaker Husband, Becky Painter. CIO, Atreides Management. Former PM, Fidelity OTC fund. No investment advice, views all my own. gavin-s-baker.com/ Sep. 07, 2020 1 min read + Your Authors

1) So much conviction on Twitter about SoftBank’s options trades.

Depending on what they did, they may have:

Either reduced or added risk.

Impacted the mkt (unlikely).

*No one actually knows.*

And btw could turn out to be a great trade (or not).

2) If it was stock replacement, then they reduced risk.

If not, then they *probably* added risk.

The FT article quoting someone with “direct knowledge of the trades” did not make it seem like they cut risk, but time will tell.

3) $4b of *the right* options bought in a day or two during an August with unusually low liquidity could have absolutely impacted the market.

This does seem quite unlikely to me and inconsistent with published reports of longer dated call spreads.

4) Be suspicious of “commentary” or “color” from desks. No one external knows the full picture and different desks have different views on what SoftBank did.

Anyways, this is a strange topic to have high conviction on because nothing is “known” and anything is possible.

5) And not to be a broken record, but everyone should respect Masa’s track record even if he at times does crazy things.

A 1000x is not “luck.”


You can follow @GavinSBaker.



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