Credit: Reuters NEW YORK (Reuters) -Traders in the options markets are bracing for industry-wide volatility when AI-chipmaker Nvidia reports results on Wednesday, with defensive options contracts on a major semiconductor ETF drawing heavy trading.
For VanEck Semiconductor ETF, the largest semiconductors ETF with some $22 billion in assets, about 2.4 put options changed hands daily over the last 10 days against every call option traded, the most defensive the trading has been in about 10 months, according to Trade Alert data.
Call options convey the right to buy shares at a fixed price in the future while put contracts offer the right to sell the shares at a given price.
“The put buying in SMH ahead of Nvidia’s earnings reflects growing concern about potential volatility for the entire sector following the report,” said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group.
Inside Telecom provides you with an extensive list of content covering all aspects of the Tech industry. Keep an eye on our News section to stay informed and updated with our daily articles.