{
    "success": true,
    "data": {
        "id": 1770875,
        "msgid": "semiconductor-stocks-surge-as-traders-bet-on-sharp-correction-1780006984",
        "date": "2026-05-28 22:00:12",
        "title": "Semiconductor Stocks Surge as Traders Bet on Sharp Correction",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Finance",
        "summary": "Semiconductor stocks have surged sharply, prompting traders to bet on a decline via put options on the VanEck Semiconductor ETF (SMH). Data reveals put open interest has reached nearly 1.7 million contracts, with implied volatility nearing 55%, while analysts note the activity reflects hedging rather than pure bearish sentiment. However, some traders anticipate a correction due to elevated valuations and expensive option premiums.",
        "content": "<p>Jakarta, CNBC Indonesia - Semiconductor stocks\u2019 sharp surge has begun\nto spark concerns among traders. This has led many market participants\nto bet on a price decline using put options on semiconductor sector\nETFs.<\/p>\n<p>Bloomberg data shows open interest in SMH put contracts has surged\nover the past two months to nearly 1.7 million, the highest since the\nETF\u2019s launch in 2011. In comparison, outstanding call contracts stand at\njust over 500,000.<\/p>\n<p>Implied volatility on SMH has also risen, nearing 55% on Tuesday\nlocal time, approaching the highest level in over a year. Zed Francis,\nChief Investment Officer at Convexitas, said the situation indicates\nmost put contracts were bought as hedging measures.<\/p>\n<p>\u201cPeople are hedging against this rally rather than chasing it,\u201d\nFrancis said, quoted by CNBC on Thursday, May 28, 2026.<\/p>\n<p>He believes the current chip stock surge is being met with risk\nmitigation activity, suggesting the rally may be more sustainable than a\ntypical boom-and-bust cycle.<\/p>\n<p>However, the rise in put contracts does not necessarily reflect\nbearish sentiment towards the semiconductor sector. The high interest is\nalso influenced by the expensive options trading on individual chip\nstocks experiencing extreme volatility.<\/p>\n<p>Implied volatility in the semiconductor sector is significantly\nhigher than the S&amp;P 500\u2019s 16%. Some individual semiconductor stocks,\nsuch as Micron, have implied volatility as high as 105%.<\/p>\n<p>Don Kaufman, co-founder of TheoTrade, said excessively high\nvolatility has led traders to prefer sector ETFs over individual stocks.\nHe considers this strategy more efficient than buying options on highly\nvolatile stocks.<\/p>\n<p>Kaufman disclosed he has purchased a SMH 535\/525 put spread set to\nexpire in late August, describing it as a bet on a significant\ncorrection following the semiconductor sector\u2019s sharp rally.<\/p>\n<p>\u201cI\u2019m taking an out-of-the-money position to anticipate a major\npullback,\u201d Kaufman said. He believes the semiconductor stock surge may\nbe nearing its end due to high valuations and expensive option premiums\nin the sector.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/semiconductor-stocks-surge-as-traders-bet-on-sharp-correction-1780006984",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}