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Nasdaq Whale Theory for Tech Stock Surge Is Stirring Doubts

  • Day traders are seen as a key driver of market volatility
  • Analysts are trying to parse trades by retail and institutions
SoftBank Stores As Group Poised to Return to Profit After Big Losses
Photographer: Toru Hanai/Bloomberg

A report that SoftBank Group Corp. is making billions by using options to bet on technology stocks has stirred speculation the Japanese conglomerate could have been a driving force behind the rally -- but not everyone is convinced.

Evidence suggests the kind of strategies pursued by institutions like SoftBank have a minimal effect on stock-market volatility, according to Benn Eifert, chief investment officer of hedge fund QVR Advisors. Citing commentary from derivatives trading desks, he said the real power is being wielded by day traders buying enormous amounts of call options on tech stocks.