Massive Options Trades in Nvidia and Micron Signal Rising Bearish Bets on Semiconductors

Options traders ramped up bearish bets against major chipmakers on Friday, executing large-scale put orders in Nvidia and Micron Technology that challenge the broader rally in semiconductors, according to reporting by CNBC Business . The surge in put activity reflects mounting caution among market participants positioning for potential downside across the sector.

Data from ThinkOrSwim and SpotGamma showed that more than 180,000 put contracts traded in the VanEck Semiconductor ETF (SMH) by midday Friday, compared to 50,000 calls. Roughly $46 million in premium was tied to puts versus $26 million in calls, with SpotGamma estimating that approximately 129,000 put contracts were bought outright. The ratio of open interest in puts to calls climbed to 1.95, its highest level since the second week of August according to Barchart, while the same ratio for the Invesco QQQ Trust rose to 1.51.

In individual equities, Nvidia saw its largest options transaction of the day shortly after the opening bell, when a buyer purchased 100,000 put contracts with a 180 strike price expiring Jan. 15 for $21 million. If held purely as an unhedged speculative position, Nvidia shares would need to decline 22 percent by expiration. While call volumes in Nvidia ran 40 percent above average, SpotGamma data indicated that approximately $270 million in total premium was tied to likely put-buying.

A substantial portion of the sector's options premium was concentrated in Micron Technology, where traders established a net $14.5 million bearish spread using deep in-the-money put contracts expiring in June 2028. The trade involved buying roughly 125 put contracts with strikes between 2,250 and 2,500 near the ask price and selling 50 contracts at the 2,050 strike, against Micron shares trading near $1,030. With an options delta near -1, the spread operates as a synthetic short position, allowing traders to bet against the equity with defined risk and without paying stock-borrow fees.

Market analysts noted that deciphering intentions in deep in-the-money and low-volume options requires nuance. 'Spreads have difficulty being categorized by midpoint analysis as well, because dealers are willing to take a haircut on one leg while getting a better premium with the other,' said Jason DeLorenzo, founder and owner of options analytics platform Volland.