Traders work on the floor of the New York Stock Exchange (NYSE) on June 18, 2026 in New York City, USA.
Gina Moon | Reuters
Just one day after setting an all-time record, the semiconductor sector is down nearly 7%, with traders finding cheap ways to bet on a bigger change in direction.
Option volume in Direxion Triple Lever Inverse Semiconductor ETF (SOXS) According to ThinkOrSwim data, calls are more than triple the daily average over the last month, and calls outnumber puts by more than 6 to 1.
The fund targets 300% of the daily inverse movement of the New York Stock Exchange Semiconductor Index, so betting on the top of the fund means betting on the bottom of the chip. Leveraged ETFs have exploded in popularity over the last year amid a huge rally in chip stocks, with daily rebalance flows regularly exceeding $20 billion, according to Barclays’ analysis of equity tactical strategies.
Direxion Daily Semiconductor has tripled its stock since the beginning of the year
At just over $4 per share, this ETF offers traders an inexpensive way to speculate on the direction of the market’s most important sectors. The number of option trades was approximately 260,000, compared to 172,000 for the VanEck Semiconductor ETF SMH.
In early trading Tuesday, more than 84,000 calls were bought compared to just under 15,000 puts. The roughly equal number of calls sold and bought suggests that traders may be hedging their bullish bets on the ETF through a spread, which could cap the upside if the fund makes more money, like today’s 24% rally.
According to SpotGamma data, eight of the top 10 trades are calls, with in-the-money 4-strike calls and 3.5-strike calls expiring on Friday being the most popular.
The biggest trade of the session so far was the sale of 300 13-strike puts expiring in January 2028, yielding $327,000. Selling an in-the-money put is one way for a trader to take a “synthetic” long position in the underlying security at a lower cost than purchasing the stock outright.
