Investing.com -- Friday's sharp Nasdaq selloff has likely begun a more coordinated unwind in systematic equity positioning, and another 2% decline could trigger broader deleveraging, Bank of America warned.

Analyst Chintan Kotecha said in a note to clients that the Nasdaq-100's 4.8% decline on Friday marked its largest volatility-adjusted drawdown since October 2025 and the 13th worst sigma decline since 1985.

BofA's estimated CTA stop-loss triggers for the NDX heading into the session were roughly 4.3% to 6.8% lower, suggesting the most risk-averse models likely began deleveraging on Friday.

However, the firm cautioned that the unwind may have further to run. "We believe at least half of the CTA long base likely remains intact, and that another ~90bps to 2% downside could trigger broader unwinds," Kotecha wrote.

S&P 500 stop-loss levels sit roughly 40 basis points to 2.6% lower, while Russell 2000 triggers are approximately 2% to 5% lower.

BofA also flagged record selling from leveraged and inverse ETFs. The firm's data showed such products sold over $12 billion of NDX exposure on Friday, the largest on record.

On the options side, SPX gamma had risen to historically elevated levels, averaging $6.4 billion per day through May and into June, which BofA estimated dampened realized volatility by approximately 1.3 volatility points over the past month.

Friday's move is said to have exposed the limits of that dynamic. "Stretched upside momentum in AI leaders reached an exhaustion point and erupted into a fragility event," Kotecha wrote.

CTA positioning in U.S. Treasuries remains short, with Friday's stronger-than-expected payrolls data reinforcing those positions.