Surprising Skyworth Options! Mysterious institutions spend billions of dollars bullish on US stocks, involving major tech stocks

The Zhitong Finance App learned that an institutional investor's multi-billion dollar bullish bet on the US stock market attracted widespread attention in the options market. Over the past month, market participants have noticed that many large US companies are buying large numbers of call options due in June 2027. Estimates of the total amount of option fees spent vary, while Nomura Holdings estimates about $3 billion.

Many bullish long-term investments are focused on tech giants, while the Nasdaq 100 index has risen 24% since April 8, which is the main driving force behind the overall rise in the US stock market. These options increase in value when the share price rises, and if volatility increases, so does their value. Although earlier market volatility indicators declined somewhat after surging in early April, the 60-day volatility of the Nasdaq 100 and S&P 500 indices remained near their highest levels in nearly five years.

Chris Murphy, co-head of Susquehanna International Group's derivatives strategy division, speculates that the buyer is a well-resourced and generally optimistic investor who is happy to hold options that are expected to rise in value when volatility rises. Murphy said, “These deals were completed by a 'large global macro investor'. This person has long been bullish on the market and wants to reap the benefits of call options and volatility rather than achieve this goal by buying stocks.”

According to data from Nomura Securities, this option buyer spent 31.6 million US dollars, 15.9 million US dollars, and 87.8 million US dollars respectively to buy affordable bullish options on Amazon (AMZN.US), CRM.US (CRM.US), and Arm (ARM.US) stocks. Amid this round of the option-buying boom, the implied volatility of two-year options for ETFs tracking the NASDAQ 100 index (QQQ.US) rose to the highest level since January compared to the S&P 500 ETF (SPY.US).

Since the expiration date of these options is still far away, the option premium is much higher than contracts with a shorter term (such as only until the expiration date) (these contracts are the main object of the transaction). This is especially true for contracts that expire on the day of the transaction, with option fees. For example, on Wednesday, 2,200 ARM $130 call options due in June 2027 traded at $47.40. Although the total option fee reached $10.4 million, its trading volume was only 0.2% of the total open options positions.

Although it is difficult to determine with certainty whether this is the act of just one investor, this recurring buying pattern suggests that one party usually opens large positions while other investors may follow suit. Charlie McEligott, a cross-asset strategist at Nomura Securities, wrote in a note to clients on Wednesday: “The performance of doing long operations is simply amazing.”