Semiconductor rally triggers record put-buying in SMH as hedging dominates
A chip-stock rally is being hedged aggressively: SMH put open interest has surged to just under 1.7 million—the most ever—versus about 0.5 million calls, while SMH implied volatility hovers around 55%, signaling hedging activity more than pure upside bets. Single-name IV is even higher (Micron ~105%), prompting traders to favor the ETF for exposure. Some players, like Don Kaufman, are using far out‑of‑the‑money put spreads on SMH for a potential pullback, suggesting a cautious stance that could support a more durable rally if hedging remains prevalent.
