12 The options book

Funds Bet Up on the Platforms and Bought Protection on the Chips

Alongside their shares, large funds hold options - contracts that pay out if a price rises, or if it falls. The two sides of that book pointed at completely different parts of the market.

4.4×

more money sat in protection against a fall than in bets on a rise

The options book, in US dollars Value of the shares covered
Protection against a fall Bets on a rise
  1. $679.0bn

    Whole markets

  2. $156.3bn

    Chip companies

  3. Mega-cap companies

    $148.8bn
  4. Gold and long bonds

    $41.2bn

Every company funds protected against was a chip maker. Not one appears on the upside list.

The shape of it

81%

against whole markets

Most of the protection covered the market itself, not any single company.

Two lists

The upside names are the mega-cap platforms. The downside names are the chip makers funds were buying at the same time.

Read the two sides together and the quarter looks less like conviction and more like a hedge: own the platforms, insure against everything else.