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Just apple market cap is 2T. Robbinhood is total 50 billion aum and SoftBank is probably betting like 5-10 billion

Now my question is how is such small money making such big moves in market and stock prices? Or is it just news media sensationalism as usual ?

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@waffle wrote:

Let us say Masa San buys 5 billion USD of MSFT stock. Now 5 billion is 0.3% of  todays MSFT market cap, ie it will hardly move MSFT price.

I do not know much about options. So what would be the impact of options he bought?


Sixty second elevator answer:

5B purchase price Depends on Over how long a period MS buys the stock. Shorter the period, the higher the impact on MSFT stock price.

With options placing a covered call requires The stock brokerage who is the counter party to the call Contract to deliver the specified shares MSFT at a specified price by a certain date. Since the Brokerage does not want to risk going into the markets to buy the MSFT at a price higher than what they will be paid by SoftBank when call is executed, the brokerage places trades to buy MSFT at a lower price which results in price of MSFT being bid up.

If SB places more option contracts to buy MSFT at a higher price, the brokerage has to cover further by buying more MSFT at a higher price in case SB exercises right to buy the stock at The higher option price which jacks up price of MSFT further which results in the melt up of MSFT. Since stock purchases are disclosed, Other investors, eg., the Robinhood crowd takes notice and piggy back their purchases of MFST to the Brokerage purchases which jacks up MSFT Further in a continuous merry go round until the buying stops and selling begins.

 

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Let us say Masa San buys 5 billion USD of MSFT stock. Now 5 billion is 0.3% of  todays MSFT market cap, ie it will hardly move MSFT price.

I do not know much about options. So what would be the impact of options he bought?

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The following article states that Robinhood users are not responsible for the price appreciation of most stocks. However, these users actions can increase prices for small, speculative stocks.

Link

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@waffle wrote:

Let us say Masa San buys 5 billion USD of MSFT stock. Now 5 billion is 0.3% of  todays MSFT market cap, ie it will hardly move MSFT price.

I do not know much about options. So what would be the impact of options he bought?


Sixty second elevator answer:

5B purchase price Depends on Over how long a period MS buys the stock. Shorter the period, the higher the impact on MSFT stock price.

With options placing a covered call requires The stock brokerage who is the counter party to the call Contract to deliver the specified shares MSFT at a specified price by a certain date. Since the Brokerage does not want to risk going into the markets to buy the MSFT at a price higher than what they will be paid by SoftBank when call is executed, the brokerage places trades to buy MSFT at a lower price which results in price of MSFT being bid up.

If SB places more option contracts to buy MSFT at a higher price, the brokerage has to cover further by buying more MSFT at a higher price in case SB exercises right to buy the stock at The higher option price which jacks up price of MSFT further which results in the melt up of MSFT. Since stock purchases are disclosed, Other investors, eg., the Robinhood crowd takes notice and piggy back their purchases of MFST to the Brokerage purchases which jacks up MSFT Further in a continuous merry go round until the buying stops and selling begins.

 

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Options provide a highly leveraged way to play stocks and indexes. Depending upon the strategy, option holders can control 10x-20x in notional value. Masa Son seems to have used bullish call-spreads, i.e. buying near-term calls and selling farther term calls. So, by putting in $4-5 billion with options, he could control $50 billion in highflying techs; this on top of $4-5 billion in stock he bought outright. This happened in a short time frame as he used the proceeds from Sprint sale to T-Mobile that happened quite recently. Also, the scale is significant. In a good year for IPO, the US does $50 billion for the whole year. But that much with options was transacted in a matter of a few weeks/months and that is huge.   https://www.pwc.com/us/en/services/deals/library/us-capital-markets-watch.html#:~:text=The%20US%20IP....

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@yogibearbull wrote:

Options provide a highly leveraged way to play stocks and indexes. Depending upon the strategy, option holders can control 10x-20x in notional value. Masa Son seems to have used bullish call-spreads, i.e. buying near-term calls and selling farther term calls. So, by putting in $4-5 billion with options, he could control $50 billion in highflying techs; this on top of $4-5 billion in stock he bought outright. This happened in a short time frame as he used the proceeds from Sprint sale to T-Mobile that happened quite recently. Also, the scale is significant. In a good year for IPO, the US does $50 billion for the whole year. But that much with options was transacted in a matter of a few weeks/months and that is huge.   https://www.pwc.com/us/en/services/deals/library/us-capital-markets-watch.html#:~:text=The%20US%20IP....


From I what have read most of the options leverage came from the Robin Hood investing crowd. who piled on after they became aware of Masa Sons options.

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What will Masa Son [SoftBank/SFTBY] do with $40 billion cash from Arm Holding sale to NVDA?   https://arstechnica.com/gadgets/2020/09/nvidia-reportedly-to-acquire-arm-holdings-from-softbank-for-...

He took huge gamble with $10-12 billion cash from Sprint sale to TMUS - using half to take long positions in highflying US techs and using the other half to buy tons of options.

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