On Friday, investors continued to increase their short positions in the semiconductor sector. A series of notable trades involving Micron and NVIDIA dominated the market, casting doubt on the recent momentum in chip stocks.
According to data from ThinkOrSwim and SpotGamma, as of midday, the put option volume for SMH exceeded 180,000 contracts, compared to only 50,000 call options; the premium associated with puts amounted to $46 million, while calls totaled $26 million. SpotGamma noted that, by volume, 129,000 put contracts appear to be bought positions.
Barchart data shows that the put-to-call open interest ratio rose to 1.95, the highest level since the second week of August. The same ratio for the Invesco QQQ Trust also continued its recent upward trend, rising to 1.51.
Several large individual stock orders stand out on the order book.
On the NVIDIA side, shortly after market open, someone bought 100,000 put options with a strike price of $180, expiring on January 15, 2027, for a total of $21 million—the largest single trade in the stock’s options market that day. If this was a speculative position, it would require NVIDIA to decline by 22% before expiration.
Perhaps the most noteworthy trade occurred in Micron.
Although call option volume was 40% above average, SpotGamma data indicates that approximately $270 million in premiums are associated with potential put option purchases. Part of this discrepancy can be explained by a series of deeply in-the-money put option trades expiring in June 2028.
Most of the trades—approximately 125 put options with strike prices between $2,250 and $2,500—traded closer to the ask price, suggesting these contracts were bought. By the same logic, the 50 trades at the $2,050 strike price were likely sold. Micron’s stock is currently trading around $1,030.
On the surface, this represents a net $14.5 million bearish spread position with an option delta close to -1, meaning the trade functions similarly to a synthetic short position. Traders sometimes choose to buy deeply in-the-money put options rather than shorting the stock directly, possibly due to high stock borrowing costs or a desire to cap risk within a defined range. When buying options, the maximum loss is limited to the initial premium paid.
Of course, when analyzing large trades with low open interest and volume that are far from the current price, relying solely on the bid-ask spread to determine direction may become ambiguous.
Jason DeLorenzo, owner and founder of the options market structure analysis platform Volland, said: “Using mid-price analysis to classify spread strategies can be challenging, as market makers may be willing to concede on one leg while receiving a better premium on the other.”