Over the last few months, special attention has been paid to Tesla and more specifically – the enchanting K-l-purchase has undoubtedly helped push the gamma squeeze that has seen Tesla’s equity burn since the beginning of the year (something we discussed earlier). In May, “Did Tesla stock increase mysterious call option purchases?”).
Weeks ago, we learned that Softbank was helping to boost the broader market with a buy strategy to spread OTM calls to a handful of high-beta tech stocks – a strategy that raised Softbank to billion 4 billion.
Now it looks like Goldman Sachs could be cashing in on a similar strategy.
Investment bank, according to IFR Reuters Tesla alone has traded nearly 100 million in the last few months. According to Bloomberg, the bank is engaged in deals that include “stock options, providing secure financing against Tesla’s shares and buying and selling its convertible bonds.”
Goldm’s equity trading desk does not deal with retail investors. Sources said that investors’ traders are still showing how to make a profit from this extraordinary market move.
In addition to making bucks in Tesla calls, Vampire Squid also rained down on buying and selling Tesla Converts (whose face is valued at more than US $ 4bn), whose shares soared sharply this summer. Goldman Sachs Bankers also made money by providing secured money against the company’s shares, or as is well known, “corporate equity derivatives deals” involving Tesla. The umbrella term for a range of transactions, including paying off margin loans or company shares, usually involves providing money against large equity bets, the IFR report said.
Softbank’s action served as a “tailwind” for the company – and finally Goldm, for no – as well as missiles fired by technology in the field before the region’s Nasdaq fell by about 12% earlier this month, helping to boost the broader market.
The report said that while single stock option volume exploded 3x in the second quarter compared to the same period last year, the increase in Tesla option volume was more significant. 45 1.45 trillion in July, up 10x from 124 billion in July last year. Amazon was “the second-largest beneficiary” of option trading, Reuters notes, with activity rising from $$ 2 billion to ૧ 48.4848 trillion over the same period.
This imbalance has occurred during the summer, where volumes in equity markets are infamously low. In simple words, the best as far as we can understand: Large financial institutions now operate equity manipulation through the option market (where the tail literally wraps the dog) as a real trading strategy.
Call us old-fashioned, but what happened in the good old days of banks only traded on information without content?
By ZeroHedge.com
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