From CNBC · Oliver Renick · · 1m 40s
AI rally ignites bullish options betting spree
Tech traders flood options markets with call buying as AI stocks rebound and volatility drops.
In brief
Tech traders flood options markets with call buying as AI stocks rebound and volatility drops. Options traders are aggressively betting on further gains in AI and tech stocks through call purchases, signaling confidence in the sector's near-term direction. Originally reported by CNBC.
Tech rally sparks options frenzy
The Nasdaq-100 posted its best day in six weeks as the S&P 500 added over 1% Thursday, with 10 of 11 sectors rallying despite the Federal Reserve hiking interest rates for the first time since 2023.
Volatility drops, bullish bets surge
Cboe's volatility gauge fell to 15.4 Thursday, the lowest in a week, as market-makers priced calls two dollars higher than puts, signaling elevated demand for upside exposure.
Intel becomes options traders' favorite
More than 1.3 million Intel options traded Thursday, nearly three times the monthly average, with 270,000 calls bought versus 140,000 puts. The stock trades at its highest since July, up 35% from summer lows.
AMD and Crowdstrike follow suit
AMD saw bullish flows with volume nearly double average, with traders buying 107,000 calls versus 71,500 puts. Crowdstrike, up 120% in the past year, saw heavy call buying with the 250-strike Friday expiry as the most popular contract.
SpaceX puts attract big sellers
SpaceX trading volume jumped as the IPO hit its highest price since July 7, with 1.5 billion dollars in premium traded. Nearly 60% of premium tied to put sales, including one sale of 41,000 puts for over 200 million dollars.
Call buying signals confidence
Of Intel's 320 million dollars in premium initiated by buyers, 231 million was tied to calls. The most popular Intel contract needs 7.7% more to pay off, showing traders expect near-term gains.
The main idea
Options traders are aggressively betting on further gains in AI and tech stocks through call purchases, signaling confidence in the sector's near-term direction.
