Chip traders hedge semiconductor rebound as selective bullish bets emerge

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Chip trader semiconductor hedging

Highlights

Put volume in SMH is more than double call volume with over 10% of $217 million in premium concentrated in 550-puts expiring Aug. 21, signaling sector caution despite Monday’s 5% gain.
Options on Marvell Technology see calls outnumber puts three-to-one and account for over 80% of premiums, targeting the $300 level after its S&P 500 inclusion announcement as implied volatility remains elevated.
Intel option volume is nearly double normal with over 70% tied to aggressive call buying following an Alphabet AI chip order and Cerebras sees $50 million in predominantly speculative call premiums.

Options positioning highlights caution and select opportunities

As reported by CNBC, put volume in the VanEck Semiconductor ETF, SMH, is more than double call volume on Monday morning, with more than half of total premiums tied to puts. More than 10% of the $217 million in premium changing hands is concentrated in the 550-puts expiring Aug. 21, a level that implies a roughly 7% decline from current prices and signals skepticism about the fund's gain of more than 5% on Monday.

At the same time, traders are still placing bullish bets on individual chip names. In Marvell Technology, calls outnumber puts by three to one and account for more than 80% of premiums after S&P Dow Jones Indices announces the company will join the S&P 500 on June 22. Buyers are largely targeting the $300 level across June, July and September expirations, even as 30-day implied volatility stands in the 98th percentile, indicating elevated option costs after the stock's recent surge.

Bespoke co-founder Paul Hickey says the latest moves in semiconductor shares remain unusually sharp, even by the standards of the PHLX Semiconductor Index. He says the swings over the past two weeks suggest the group may remain volatile rather than move straight lower, with more turbulence possible before July 4.

Intel and Cerebras draw speculative call buying

Intel is also attracting heavy call activity as headlines around artificial intelligence chip production lift interest in the stock. Alphabet reportedly commissions Intel to make 3 million in-house AI chips, and options volume in Intel is running at nearly twice its daily average on Monday morning, with more than 70% of that volume tied to calls.

Buying interest in Intel is notably aggressive, with nearly three times more calls bought at or above the ask and more than 60% of those calls sitting over 5% out of the money. That pattern points to traders positioning for a stronger upside move rather than using options mainly for hedging.

Cerebras is also part of the rush, with more than $50 million in premiums changing hands and the activity overwhelmingly linked to calls. The top 10 most active contracts by dollar amount are all calls, and more than 60% of them are more than 5% out of the money, underscoring how traders are favoring speculative upside in selected semiconductor names while keeping broader sector hedges in place.

In our earlier coverage of AMD’s rally and technical setup, we noted the stock was holding above key moving averages while approaching the psychologically important $500 resistance area. The piece also highlighted muted institutional-flow catalysts, mixed oscillator signals, and the risk that short-term overbought conditions could trigger choppy swings even as the broader bullish structure remained intact.

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