Tech giants are seeing a profound split in fortunes, and Bank of America has devised a way to profit from their divergence

Spencer Platt/Getty

Traders may be able to profit from a divorce in tech stocks.

• US and Chinese tech giants are a lot more divorced from each other this year than they were in 2017, Bank of America Merrill Lynch derivatives analysts have observed.
• They recommend a trade that could profit from the split between the FAANG + BAT stocks.

The biggest US and Chinese tech stocks meld together into a convenient acronym: FAANG + BAT. But their fortunes are anything but similar right now.

Facebook, Amazon, Apple, Netflix, the Google parent Alphabet, Baidu, Alibaba, and Tencent are trading this year in ways representing a sharp turn from their harmony in 2017, Bank of America Merrill Lynch has observed.

"A profound shift appears to be underway towards more divergent returns on an individual basis," a team of derivatives analysts led by Stefano Pascale said in a client note on Tuesday. ...

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