Chris Whittall
@chriswhittall
Associate Editor, derivatives and secondary markets, at IFR. Views all mine.
Citadel Securities: Last week saw the largest week of retail equity selling since 2022 Retail investors were net sellers every day of the week Two of the three largest retail tech sell days ever on Citadel Securities' platform happened last week
3/ Korean margin trading balances starting to decline after peak 4/ Margin trading in Japanese stocks ~ highest level since 1990
Interesting Goldman Sachs chart pack on "Tracking the momentum-led deleveraging in Tech" 1/ Option trading volume became more concentrated and short-dated
Worth remembering much of this debt, issued by the likes of Meta, Oracle, SpaceX, Nvidia, has only existed for a matter of months Meta CDS only started trading in November - now there's $6bn outstanding SpaceX CDS now has $1bn after debuting in June
Kalshi claiming to be better at predicting Fed decisions than the fed fund futures market "Kalshi has now been more accurate than futures on every Fed Funds decision since 2022. It's not luck." (screengrab via LinkedIn)
Catching up on emails after two weeks out and enjoyed this one from Morgan Stanley's chief cartoonist Andrew Sheets:
Bank of America on Amazon's surprise $25bn bond deal "The deal should also inject even more uncertainty into the hyperscaler / AI supply outlook.... [it] pushed 30yr hyperscaler spreads from +6 to 15bps wider ... [and] contributed to the +8bps jump in 10yr Treasury yield."
Bank of America credit and debit card data showing a significant boost to retail spending in host cities 'Since the BAC card data only cover US-based households, the "World Cup effect" is likely much larger than the data suggest.'
Me trying to worm my way back into the neighbourhood WhatsApp group after disgracing myself www.wsj.com/business/dav...
Love that we're still doing this Lads, we don't need a model running 100k simulations to tell you France are still the favourites for the World Cup
We've seen this dynamic already with a sharp increase in CDS trading on hyperscalers over the past year The likes of Oracle, Meta etc have increased their debt issuance significantly That has encouraged large amounts of CDS trading too Expect SpaceX to fit into that pattern //
SpaceX is expected to be a heavy borrower in debt markets Expect that to foster a vibrant CDS market too
CDS market comes hot on the heels of SpaceX's $25bn bond sale last week Those bonds have traded down in secondary markets Prices of SpaceX's 30yr notes now at ~96% of face value SpaceX CDS trading at closer to high yield than the IG ratings the bonds received
SpaceX out with initial pricing on its 5-tranche dollar bond www.ifre.com/bonds/244711...
"Ultimately, I suspect the [Fed] balance sheet will decline by more than many expect, but I also suspect the market implications will be less important than most fear" Seth Carpenter, Morgan Stanley's chief economist (and former senior Fed staffer)
BofA: "The investor consensus seems to be that Warsh will lean hawkish in his press conference. We think he'll be dovish." Almost as if no one has the faintest idea
10-year Gilt yields decline to a two-month low Three-month+ low for Italian yields
Options on mega-caps usually start trading 2 business days post-IPO Given the thin free-float (just 4%), options are probably the best way to short SpaceX for anyone doubtful of its $1.8trn valuation Puts usually trade at a premium post-IPO anyway b/c of a lack of shares to borrow to sell short//
Musk’s legions of fans have already helped make Tesla options the fourth most actively traded contracts in the market, according to OCC data Roughly 610m Tesla options have traded so far this year - > Apple, Amazon and Microsoft combined Only SPY, QQQ and Nvidia options are more popular
May was set to break records in retail cash equities and options trading activity, Citadel Securities said recently “Retail traders are the new price setters in the market" - CS's Scott Rubner There's also a lot of retail - 20-25% - in the SpaceX IPO www.citadelsecurities.com/news-and-ins...
The SpaceX IPO comes at a time when US options markets have grown considerably ADV volumes are > 4x higher than a decade ago That comes as retail investors have become progressively more active in US equity markets, including options
Goldman says it's now investing in being a wholesaler to retail aggregators
Schwab, Fidelity, Vanguard hold ~80% ($13.8trn) of retail assets Robinhood has just 2% but averaged 4m trades a day in 2025, ~ 1/2 that of Schwab Retail brokers route more than 87% of their order flow to marketmakers (or wholesalers) who internalise the vast majority of that flow (Goldman charts)