cc @peark.es @ironeconomist.bsky.social @brokenbanker.bsky.social anything stand out to you guys as obviously wrong with the above?
Replies
Not familiar enough with the numbers to comment but the logic is reasonable.
sep 1, 2025, 12:08 pm • 2 0 • view
fwiw, saw price action and immediately thought 'shenanigans', and then the subsequent IPO arb explanation. which made sense, but struck me as just inherently open to something unexpected happening in a low liquidity late summer period, ie: 'rather you than me'. courageous, calculated, or bonkers 🤷♂️
sep 1, 2025, 12:09 pm • 1 0 • view
Maybe the nav was cheap to underlying already. Nav’s on etf’s are somewhat bounded especially if you are eg Jane Street and can be your own primary dealer if necessary. Owning nav vs underlying can be a profitable etf basis trade anyway that’s how the etf market making works.
sep 1, 2025, 12:06 pm • 0 0 • view
So it could be a situation where you wanted to do this trade and your etf desk wanted to be long (short? - don’t know etf market conventions) the etf basis anyway. Or it could have been a financing trade in part depending on underlying borrow conditions.
sep 1, 2025, 12:06 pm • 0 0 • view
I think broadly when you see a trade done in this size it probably needed several following winds to line up. If a major market player was absorbing a selling flow at an already profitable level of nav vs underlying for example holding a few days for the pop would be a natural addition.
sep 1, 2025, 12:06 pm • 1 0 • view
I don’t have expertise or visibility on what stuff like financing would be for this trade in its various incarnations. There also could have been an options component too. I guess this stuff has skew because ipo vol tends to be one way so could have additionally been selling ark options maybe?
sep 1, 2025, 12:10 pm • 1 0 • view