On Friday, bears continued to accumulate positions against the semiconductor group following a series of eyebrow-raising trades. micron and Nvidia He dominated the tape and questioned Chip’s movement.
Trades over 180,000 puts SMH By midday, there were 50,000 calls, and the premium associated with the puts was $26 million compared to $46 million, according to data from ThinkOrSwim and SpotGamma. Based on volume, 129,000 put contracts appear to have been purchased, according to SpotGamma.
The open interest ratio of put contracts to calls rose to 1.95, the highest level since the second week of August, according to Barchart data. same ratio Invesco QQQ Trust The recent increase continued, reaching 1.51.
Several large individual stock trades were also caught on tape.
At Nvidia, just after the opening bell, someone bought 100,000 180-strike puts expiring on January 15th for $21 million, the largest stock options trade of the day. If this were a speculative position, Nvidia would need to fall 22% before the deadline.
Perhaps the most interesting deal was Micron.
MU and NVDA in the last 3 months
According to SpotGamma data, call volume was 40% higher than average, but about $270 million in premium was tied to put buying. This difference can be partially explained by a series of trades in deep-in-the-money put contracts expiring in June 2028.
The majority of the trades (approximately 125 puts with 2,250 to 2,500 strikes) were near-sell trades, suggesting they were bought. By the same logic, 50 deals could have been sold at 2,050 strikes. Micron stock is trading around $1,030.
Interpreted at face value, this results in a net $14.5 million bearish spread position with an option delta near -1. This means that the trade acts like a synthetic short position. Traders buy deep-in-the-money puts instead of shorting stocks when the cost of borrowing a stock is too high or when they want to secure a clear risk position. When you buy options, the most you can lose is the amount you put in.
Indeed, when analyzing trades that are far out-of-the-money with low open interest and volume, the interpretation of the bid-ask spread can become ambiguous.
“Spreads are difficult to categorize even with midpoint analysis, as dealers take haircuts on one leg while trying to get a better premium on the other,” said Jason DeLorenzo, owner and founder of Volland, an options market structure analysis platform.
