Chip rebound causes traders to hedge

As for chip makers, traders are ordering a la carte and leaving buffets short.

More than double the call volume on Monday morning VanEck Semiconductor ETF (SMH)more than half of the total premium is tied to puts. Of this, more than 10% of the $217 million premium exchange hands were exchanged for 550 puts expiring on August 21st. This level is down 7% from current levels and shows traders are skeptical of the chip ETF’s 5%+ rally on Monday.

Despite the overall bearish sentiment towards the group, traders placed some bullish bets on potential winners. for example, marvel technologycalls outnumber puts 3 to 1, more than 80% of premiums. The move comes after S&P Dow Jones Indices announced that the company’s chipmaker S&P500 Marvell’s call buyers were primarily targeting the stock’s $300 level over expirations in June, July, and September. These at-the-money bets aren’t cheap. Marvell’s 30-day implied volatility is in the 98th percentile, meaning its premium has increased significantly thanks to the recent stock price rally.

“The last two weeks have been pretty crazy, even for a volatile index like[PHLX Semiconductor Index],” Bespoke co-founder Paul Hickey said. “And while we had to make a move both to the top and now to the bottom, I don’t think it will sell anytime soon. Get ready for more July 4th fireworks!”

Headline fever is also on Intel”as fuse alphabet According to reports, it has asked the company to manufacture 3 million of its own AI chips. Intel’s options trading volume was hovering at nearly double the daily average on Monday morning, with more than 70% of the trading volume related to calls. Almost three times as many calls were bought above ask, and over 60% of the calls were 5% or more out of the money.

cerebrum also joined in the frenzy. The newcomer pocketed more than $50 million in premiums, most of which were related to Kohl. The top 10 most popular contracts by value were all calls, with more than 60% of them being 5% or more out of the money.