SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally

Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by corin_ on Friday September 04, 2020 @12:34PM (#24376477)

The purpose of buying call options is to to make a profit. It's hard to imagine that buying them and doing nothing other than buying them could be considered illegal. That's not manipulating the system any more than Buffet manipulates the system every time he buys stock (by also sending out the message that he thinks the stock is worth buying, just because he bought it without even needing to say anything about it).

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by pmiller2 on Friday September 04, 2020 @12:52PM (#24376642)

The sheer magnitude of it is what makes it seem like a pump and dump, however. The mechanics are broadly similar: send a signal that should cause people to bid up securities you own, then drop the bottom out by selling when the price goes up enough.

I’m not saying it’s illegal per se, but financial misdeeds don’t tend to get punished in the US, unless the victims are wealthy enough. See, for instance, the global financial crisis of 2008 vs Bernie Madoff.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by itsoktocry on Friday September 04, 2020 @12:50PM (#24376627)

>It's hard to imagine that buying them and doing nothing other than buying them could be considered illegal.

In the purest sense, sure.

I bet there will be more to this story, and I think if insiders or associated holding companies are found to be doing so, it's at least a grey area.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by mumblemumble on Friday September 04, 2020 @12:49PM (#24376617)

It would come down to intent. If the intent of buying a lot of options is, "I want a big position," or, "I want to hedge a big position," sure, that's probably fine. If the intent is, "I want to influence the market in some way," not so much.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by pfortuny on Friday September 04, 2020 @01:13PM (#24376833)

As long as there is no inside information, buying or selling should be perfectly legal, if done inside the legal limits.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by mumblemumble on Friday September 04, 2020 @01:30PM (#24377027)

That last "if" is the crux. Intent is a huge factor in what is and is not considered legal market behavior. For example, consider banging the close. Buying lots of futures at a certain time of day is not illegal in and of itself. But it's quite illegal if regulators show that your purpose in doing so was to influence the settlement price of some other asset in which you hold a position.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by WrtCdEvrydy on Friday September 04, 2020 @02:00PM (#24377344)

Wouldn't banging the close be priced into the market?

Can you leverage buying a lot of calls or puts into making profit for yourself?

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by tw600040 on Friday September 04, 2020 @02:19PM (#24377509)

How are they going to prove intent?

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by mumblemumble on Friday September 04, 2020 @02:46PM (#24377731)

It tends to involve things like subpoenas and depositions.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by valuearb on Friday September 04, 2020 @03:37PM (#24378192)

Trading on inside information shouldn't be illegal either, it actually benefits even market participants who don’t have access to it.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by oarsinsync on Friday September 04, 2020 @04:42PM (#24378687)

> it actually benefits even market participants who don’t have access to it

How?

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by valuearb on Friday September 04, 2020 @11:15PM (#24381142)

Insider trading drives prices closer to fair value. A CEO dumping shares before reporting a bad quarter saved money for unknowing purchasers buying the stock. If the CEO buys shares before reporting a huge new government contract, they get a better price for clueless sellers.

Now public companies could still restrict CEOs and other employees from profiting from insider knowledge. It could even be as simple as requiring employees to file disclosure filings before any stock transaction to level thevplayomg field.

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by cmwelsh on Friday September 04, 2020 @08:25PM (#24380331)

I think he means that in technical analysis, they trade based on price action. Thus, insider trading gives you a peek into something that the fundamentals haven’t revealed yet (the price will change to reflect the secret news).

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Re:SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by tw600040 on Friday September 04, 2020 @02:20PM (#24377510)

Can't imagine any way one can prove intent one way or another here..

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