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The Japan-based holding company, Soft Bank, reportedly purchased billions of dollars worth of equity derivatives in the United States, triggering a month-long rally in technology stocks. The surge in call option trading has surprised even market veterans who specialize in derivatives. Research by Goldman Sachs has shown that on a daily basis, the total value of call options traded on individual Wall Street technology stocks averaged $335 billion in the past two weeks alone, three times the moving average in the 2017-2019 period. This contributed to a sharp overheating of the indices, resulting in the impulsive sell-off that started last week.
Even though the S&P500 is set up for a correction, longer-term, the index will reach significantly higher prices. Our target in the S&P500 remains in the area of 6500 points. Afterward, it´s time to brace yourself and buckle up for the next big sell-off.
The Japan-based holding company, Soft Bank, reportedly purchased billions of dollars worth of equity derivatives in the United States, triggering a month-long rally in technology stocks. The surge in call option trading has surprised even market veterans who specialize in derivatives. Research by Goldman Sachs has shown that on a daily basis, the total value of call options traded on individual Wall Street technology stocks averaged $335 billion in the past two weeks alone, three times the moving average in the 2017-2019 period. This contributed to a sharp overheating of the indices, resulting in the impulsive sell-off that started last week.
Even though the S&P500 is set up for a correction, longer-term, the index will reach significantly higher prices. Our target in the S&P500 remains in the area of 6500 points. Afterward, it´s time to brace yourself and buckle up for the next big sell-off.
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📊 Free daily market insights combining macro + Elliott Wave analysis
🚀 Spot trends early with momentum, sentiment & price structure
🌐 Join thousands trading smarter - full free analyses at dailymarketupdate.com
🚀 Spot trends early with momentum, sentiment & price structure
🌐 Join thousands trading smarter - full free analyses at dailymarketupdate.com
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.