90K Call Contracts Opened — Are Bulls Starting to Buy the Dip?
It's been tough, but we finally got a big call order. A bounce needs big call orders underneath it. But then again, just because there are big call orders doesn't mean it's time to be bullish.
The January-expiry DRAM 60 call, $DRAM 20270115 60.0 CALL$ , opened 87K contracts on Monday, with about $16M+ traded.
This order is the real deal: out-of-the-money strike, nearly 100K contracts opened, over $10M traded. That's a serious bet on a bounce.
The strike is out of the money, at the level where the early-October drop started. That means the bounce target isn't very high. But if a real bounce starts, it could be enough to take SPY to 800.
Of course, Monday's weak bounce wasn't just bulls. SOXX opened the Oct 30 expiry 360 put, $SOXX 20261030 360.0 PUT$ , with 70K contracts opened and about $1.75M traded.
If it were only 20K contracts, no big deal. But 70K contracts is worth thinking about.
To see the power of huge deep out-of-the-money puts, go back to Jan 22. A crazy deep OTM China ETF put order opened 230K contracts. In that article I marked a bearish big order with a trade price of just 0.17:FXI33put, $FXI 20260320 33.0 PUT$ , 230K contracts opened.
Before that, on Jan 6, a big player bought 100K call options to go long China stocks — someone spent over $23M to buy 92K KWEB 40 calls$KWEB 20260821 40.0 CALL$ .
So how did the bull vs. bear fight end? Just look at how FXI and KWEB traded after Jan 22.
That said, SOXX's bearish big order expires Oct 30, so the short bet is very clear. It's betting earnings season from big tech will make semiconductors worse. That's much more obvious than January. Same guess as yesterday: if Meta's earnings on Thursday are fine, this pullback probably stops.
But the counterattack may not start with Meta — it could start with Tesla. A bunch of call orders with strikes above 400 showed up out of nowhere. I was thinking about selling calls, but now I have to be careful.
Besides DRAM, NVDA also had a big bullish combo: sell put 185 $NVDA 20270115 185.0 PUT$ + buy call 235 $NVDA 20270115 235.0 CALL$ , each over 10K contracts opened. The target is a bounce back to the prior high of 235. That's probably about where semis close this year.
No new info. The stock broke down before earnings. If it keeps falling into earnings, then selling puts becomes worth considering.
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