Options Traders Pile Into Leveraged Bet Against Chip Stocks
- Call trading on bearish ETF surges to record amid tech rout
- Production constraints put pressure on semiconductor industry
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As chipmakers head for their worst month since the pandemic outbreak, options traders are betting the selloff has further to go.
The bearishness was evident in the Direxion Daily Semiconductors Bear 3x Shares (SOXS), an exchange-traded fund that pays three times the inverse return of the Philadelphia Semiconductor Index. As the benchmark tumbled as much as 3.2% Tuesday, call options on the ETF, which amount to wagers against chip stocks, saw volume exploding to a record 164,000 contracts.