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The devil incarnate, Softbank?

General - 9 September 2020

In the recent US tech market gyrations, the name Softbank has cropped up to take on the role of villain of the piece. It turns out that Softbank has been the buyer of enormous quantities of leveraged call options on US mega-tech shares. The result? A distortion of the usual internal dynamics of the equity markets. The mechanics are complicated and Ingham Analytics explain them in “The devil incarnate, Softbank?” The consequences of the role Softbank has played in engineering a fractured tech market has yet to fully play out. Will it be the devil incarnate? If you are physically invested in US tech you’ll want to read this note – and think about taking out some derivative protection.

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