SoftBank phasing out derivatives option after losing market value by $17 bn

SoftBank Group Corp. is quietly winding down its controversial derivatives strategy after a sustained backlash from investors, according to people familiar with the matter.

The Japanese conglomerate is letting its options expire, instead of maintaining its positions, the people said, who declined to speak publicly. About 90% of the contracts will close out by the end of December because they are short-term, according to one of the people. SoftBank will hold on to its underlying portfolio of big tech stocks, which included Amazon.com Inc. and Facebook Inc., the person said.

SoftBank shareholders balked after SoftBank’s foray into derivatives trading was first disclosed in September, cutting the company’s market value by as much as $17 billion.