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Is Fed Policy Driving Institutions To Short QQQ Options?

Institutional investors have billions of dollars to spend on resources to hire smart analysts, run advanced analytics, and use cutting-edge tools that are out of reach from retail investors. Following every action by an institutional investor won’t guarantee success. Still, it is important to keep an eye on what they’re doing.

Which Of The Institutional Investors Are Bullish Or Bearish On QQQ Now? 

The sentiment of smart money for PowerShares QQQ Trust (US:QQQ) declined in the last 12 months. PowerShares QQQ Trust has 2100 institutional owners who are long on the stock and 77 institutional investors are short. 84 other owners held both long and short – likely to hedge their positions.

The institutional ownership in QQQ rose from 160 million shares in December 2019 to 230 million shares at the end of 2022, which is an increase of 30%. But institutional investors are buying more put options in QQQ than call options. The put/call ratio is 2.1 as of the end of January 2022. The higher ratio indicates that more institutional investors are more bearish in QQQ. 

At Trade Algo, we analyze through thousands of data points to uncover top investment ideas. For example, the boom of electric vehicles led lithium prices to double over the past year. There are excellent opportunities in this industry. So, we scour through the universe of stocks to select the top 10 EV stocks that are poised to be the next Tesla with outsized returns. We do this analysis every day, and we will look at institutional investors’ activities in PowerShares QQQ Trust (US:QQQ).

Institutional Put/Call Ratio

According to Trade Algo’s database, Westpark Management held the largest position in PowerShares QQQ Trust (US:QQQ) with shares worth $48,139,850,000. Bank of America is second with 16,696,652 shares worth $5,976,733,000. The next largest is Morgan Stanley with 15,894,444 shares worth $5,689,576,000. The rest of the group includes Goldman Sachs, PNC Financial Services Group, Susquehanna International Group, LPL Financial, UBS Group, Wells Fargo, Citigroup, Envestnet Asset Management, JPMorgan Chase, and Healthcare of Ontario Pension Plan Trust Fund. 

Fed Chair Jay Powell says rate hikes and tighter policy will be needed.

The short position by Alger Spectra Fund is the largest with 702,873 shares worth $271,386,000. Weiss Strategic Interval Fund is also short with 135,812 shares worth $48,615,000. Next largest short positions are held by Partners III Opportunity Fund, Calamos Phineus Long/Short Fund, Calamos Long/Short Equity & Dynamic Income Trust, Marketfield Fund, Alger Dynamic Opportunity Fund, Federated Prudent Bear Fund, Leuthold Core Investment Fund, and Grizzly Short Fund. 

Alkeon Capital Management holds the largest put position with 42,750,000 shares worth $15,302,789,000. Susquehanna International Group comes in second with 40,810,800 shares worth $14,608,634,000. The third-largest position is held by Bank of America with 34,367,700 shares worth $12,302,262,000. The remaining institutional investors include Citigroup, Citadel Advisors, Barclays, Jane Street Group, Goldman Sachs, Parallax Volatility Advisers, Millennium Management, UBS Group, and IMC-Chicago. 

As for the largest call position, Susquehanna International Group holds 40,810,800 shares worth $14,608,634,000. Citadel Advisors holds the second-largest position with 18,740,100 shares worth $6,708,207,000. The remaining are Barclays, Millennium Management, Jane Street Group, Bank of America, Parallax Volatility Advisers, Goldman Sachs, Citigroup, Wolverine Trading, IMC-Chicago, and Leonard Green & Partners. 

Davide Leone & Partners Investment has the largest portfolio allocation in QQQ with 70%. That was a decline of 33% from the prior quarter. Susquehanna Foundation is second with 59%. Weather Tactical Fund has a portfolio allocation of 58%, which declined by 36% from the prior quarter. The rest of the group is AdvisorShares Dorsey Wright GSM US Core ETF, Sante Capital Fund, Westpark Management, Anchor Risk Managed Equity Strategies Fund Institutional Class, and Q3 Asset Management.