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Originally Posted by Rain Man
I don't quite get how the market responds to option trading. So Softbank is buying a bunch of call options. Why is that pushing the market up? Is it just magnifying momentum because they exercise calls when prices go up and that in turn makes prices go up more? And then the opposite happens when it goes down?
We're having a big pullback on tech. Is it all or mostly attributed to this one company? If so, that's scary.
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I imagine the entities selling them a ton of calls are hedging the bet by purchasing a lot of shares. That's probably pushing prices up. I doubt it's the only thing. A lot of new traders/investors are pushing money in too. There are always traders riding momentum too. It got going and went a ways too far.