On Monday, trading volume in the VanEck Semiconductor ETF (SMH) saw a notable shift, with put options outpacing call options by more than double, reflecting a bearish sentiment among traders. Specifically, over 10% of the $217 million in premiums involved puts expiring on August 21, suggesting expectations of a 7% decline from current levels despite a recent 5% bounce in the ETF.
In contrast, Marvell Technology experienced a surge in bullish activity, with calls outnumbering puts three to one, driven by its upcoming inclusion in the S&P 500 on June 22. Traders are targeting the $300 level for Marvell across multiple expiration dates, although the high implied volatility indicates that these bets are costly.
Paul Hickey from Bespoke noted the volatility in the semiconductor index and hinted at potential continued fluctuations leading up to the July 4th holiday. Additionally, Intel is gaining attention as Alphabet has commissioned the company to produce 3 million AI chips, resulting in options volume for Intel nearly doubling its daily average, with a significant portion tied to calls.
Similarly, Cerebras saw over $50 million in premiums, predominantly in call options, indicating a strong bullish sentiment in the market for certain chipmakers