Options traders piled into bullish tech and index trades after the Nasdaq-100 posted its best day in six weeks and volatility eased. Unusually heavy call buying hit Intel, AMD, Crowdstrike and SpaceX, though some traders still bought puts on names like SpaceX.
Interest rates just went up, AI industry leaders keep warning about doomsday risks without regulation, yet the Nasdaq-100 posted its best day in six weeks. Options traders responded by chasing the rally rather than fading it.
Volatility eases as stocks rally
Cboe's volatility gauge dropped more than two points to 15.4 Thursday, the lowest in a week, after jumping to its highest since late July on Wednesday as the Federal Reserve hiked interest rates for the first time since 2023. The S&P 500 added more than 1% Thursday as 10 of 11 sectors rallied, and market-makers priced at-the-money calls two dollars above equivalent puts, a skew that points to elevated demand for upside exposure.
Options volumes in Intel, AMD, Crowdstrike and SpaceX all traded above their 30-day averages Thursday, with positioning leaning bullish across the board.
Intel and AMD draw heavy call buying
Intel is quickly becoming one of the most popular options trades as the stock trades at its highest since July, extending its rally off the summer low to 35%. The company is reportedly in talks with SK Hynix to make chips in the U.S., Reuters reported Wednesday.
More than 1.3 million options traded on Intel Thursday, almost three times the monthly average. About 270,000 call options were likely bought versus under 140,000 puts, according to ThinkOrSwim data. Of the $320 million of premium initiated by buyers, $231 million was tied to calls, SpotGamma data show. The most popular contract expiring after Friday was the 115 strike expiring Oct. 2, which needs another 7.7% to pay off.
AMD also saw bullish flows, with volume nearly double its average. Traders likely bought 107,000 calls compared with 71,500 puts, and sold as many puts as they bought, Cboe LiveVol data show. The biggest single trade was a purchase of 1,500 550-strike calls expiring Nov. 20 worth $8.3 million, paired with a sale of the same number of 750-strike calls expiring in June of the following year for the same value — a combination that breaks even only if AMD rallies past $615 by the November expiry.
Crowdstrike and SpaceX see mixed positioning
Bulls also showed appetite for Crowdstrike, up 120% over the past year. The most popular contract to buy was the 250-strike call expiring Friday, a $2 trade that needs another 2% to break even.
SpaceX traded at its highest price since July 7, and more than $1.5 billion in premium changed hands, with $1.1 billion tied to puts. But almost 60% of that premium was likely tied to a handful of big put sellers, including one sale of 41,000 205-strike puts expiring Friday for over $200 million.
Source: CNBC
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