U.S. stocks shed an estimated $3.7 trillion in market value during a Thursday sell-off. Retail investors took profits as volatility rose, while trading strategies may also have added selling pressure. The strategy-flow figures are estimates, not a verified tally of completed trades. The available account does not specify the calendar year or how it calculated the market-value loss.
- Retail investors began selling within the first half hour. The evidence cited does not show that hedge funds and long-only managers were net sellers.
- Estimates for options, volatility-control strategies and leveraged ETFs pointed to possible added pressure. They cover different instruments and cannot be combined into one total.
- Technology and AI-infrastructure stocks fell sharply. Separate crypto reports recorded price declines and heavy long liquidations.
Retail selling meets a weaker buying base
Bloomberg’s account, dated Nov. 6, said investors initially bought U.S. stocks after uncertainty around the midterm elections eased and oil prices fell. They later reconsidered what Democratic control of Congress might mean for data center expansion.
That political concern was one explanation offered for the change in sentiment, not an established cause of the sell-off. The account identifies no newly enacted restriction on data centers and does not quantify how much the political outlook contributed to the decline.
Vanda Research said retail investors began taking profits within the first half hour of Thursday’s session. The firm said retail net selling was heavier in only two sessions during the March 2020 turmoil.
Vanda strategist Viraj Patel described retail investors and systematic strategies as sellers, while institutional buyers stepped back. That points to weaker buying support. It does not show, on its own, that hedge funds or long-only asset managers were net sellers.
The estimated $3.7 trillion decline refers to lost market value, not cash withdrawn by investors. The account does not specify the market universe or calculation method, so the figure is a reported estimate, not a precisely defined close-to-close measure.
Potential strategy flows are not completed trades
Several estimates pointed to selling that could follow from falling prices or changing risk conditions. They cover different strategies and instruments, and do not establish how much was ultimately traded. Adding them together would produce a misleading total.
Nomura strategist Charlie McElligott estimated that options dealers’ negative gamma exposure could generate about $7 billion in additional selling for every further 1% market decline. The estimate describes possible hedge adjustments as prices fall. The account does not specify the benchmark or show that this amount had already been sold.
Volatility-control strategies were estimated to need to reduce stock holdings by $61 billion, based on conditions at the time of calculation. Leveraged exchange-traded funds faced an estimated $47 billion in stock sales through rebalancing. The report gives no further calculation details or shared forecast window for these estimates.
Vanda estimated that commodity trading advisors, or CTAs, rules-based trading firms and strategies, sold about $13 billion in S&P 500 and Nasdaq futures. That estimate covers futures, not necessarily sales of stocks themselves.
These mechanisms can amplify a decline. Options dealers may sell underlying assets to adjust their hedges. Volatility-control strategies can cut exposure when volatility rises, and leveraged ETFs rebalance to maintain their targeted exposure. But potential flows are not proof of completed trades. The figures alone cannot show how much each mechanism contributed to Thursday’s losses.
Technology and AI-related shares lead losses
The Nasdaq 100 recorded its largest decline since March 2020, according to the report. It gave no percentage figure or indication of whether the comparison referred to daily percentage losses.
Goldman Sachs’ prime brokerage trading desk estimated that fundamental long-short funds lost about 1.3% on Thursday, while technology-themed funds lost more than 4%. Those are the desk’s estimates for the fund groups it tracks, not for every fund using those strategies.
Baskets covering storage, optical networking, data centers and AI semiconductors fell between 12% and 15%. The losses show that stocks tied to AI infrastructure can be vulnerable to sharp repricing, even if the broader technology trend remains intact. The figures do not establish whether valuation concerns, political uncertainty or other factors drove the declines.
The VIX, an indicator of expected near-term stock-market volatility, rose from 16.6 near the open to almost 28 at the close. The jump reflected greater demand for protection against market swings, but it does not identify what caused the sell-off.
Crypto losses and liquidations came in separate reports
Crypto figures from separate reports should not be treated as a synchronized measure of Thursday’s stock-market session. A Nov. 5 report citing CoinGecko put Bitcoin down 5.8% at $75, 954, Ethereum down 7.5% at $2, 251 and Solana down 7.9% at $89.16. Total cryptocurrency market capitalization was reported down 4.6% to about $2.66 trillion. The report did not give the timestamp for its price snapshot.
CoinGlass data cited in that report counted 210, 326 traders liquidated over the preceding 24 hours. Long positions, or bets that prices would rise, made up 88.2% of liquidations. In the latest four-hour window cited, $817.35 million in bullish positions were closed. That four-hour figure covers a different measurement window and should not be added to the 24-hour total.
A separate report on Bitcoin’s fall below $76, 000 cited $954.38 million in long liquidations and $127.30 million in short liquidations. The report does not specify its measurement window, so these amounts should not be combined with the CoinGlass figures. Liquidations are forced closures, often triggered when traders cannot meet margin requirements. They differ from estimates of potential stock-market rebalancing.
The reported crypto declines and stock losses happened around the same period, but the available figures do not show that the equity sell-off caused the crypto moves.
Key questions and answers
-
What does the $3.7 trillion figure measure?
It is a reported estimate of lost U.S. stock-market value, not cash withdrawn. The account does not specify the market universe or calculation method.
-
How much strategy-driven stock selling was confirmed?
No combined total of completed trades is established. The cited figures include potential adjustments and estimates for different strategies and instruments.
-
What do the crypto figures show?
Separate reports recorded declines in Bitcoin, Ethereum and Solana, alongside liquidations concentrated in long positions. Their dates and measurement windows do not establish a direct link to the stock sell-off.
Strategy-driven flows can intensify a market move, but the estimates reported here do not establish how much they amplified this particular decline. A plausible mechanism is not the same as a measured cause.
