Semiconductor options sentiment turns bullish as $129 million SMH put trade bucks the crowd

Bullish positioning in the VanEck Semiconductor ETF (SMH) strengthened Monday as the ratio of open put to call contracts fell to 1.89, its most call-leaning level since early April, according to Barchart. At the same time, the biggest single options trade across the market was a bearish $129 million purchase of 20,100 deep in-the-money SMH put options expiring Nov. 20, a move that data from SpotGamma and ThinkOrSwim suggests was likely a new synthetic short position. The split highlights a familiar market dilemma in semiconductors: follow improving broad sentiment or side with a large contrarian wager as option costs fall. SMH implied volatility (market pricing for expected swings) dropped from 65% last month to 40% Monday, its lowest since February, making protection and directional bets cheaper. Traders had previously built up puts in late May and early June as SMH momentum slowed, with the put-call ratio reaching a one-year bearish high on June 24, two days before the fund peaked and then fell into a 25% drawdown.

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