Semiconductor stocks are facing a significant downturn, with the VanEck Semiconductor ETF (SMH) down approximately 1% as Qualcomm’s early rally completely reversed. Despite this, bullish sentiment persists among traders, particularly in Nvidia, where a notable $2.2 million purchase of 2,168 $210-strike calls expiring May 15 indicates confidence in further upside. Nvidia shares recently hit an all-time high of $212.65, and call options are currently outpacing puts by more than two-to-one.

Intel is also attracting attention, with call volumes exceeding puts following a remarkable 100% rebound from last month’s lows. One trader executed a complex call spread, selling 3,000 $60-strike calls to finance the purchase of 10,000 $95-strike calls, betting on increased volatility. This strategy is high-risk, as it requires Intel to remain above $108 by expiry for profitability.

Market professionals should note the resilience in call buying despite broader sector weakness, signaling potential for volatility-driven opportunities in semiconductor stocks ahead of upcoming earnings.

Source: cnbc.com