Chips ETF attracts puts at highs
Put buying led yesterday's option activity in the Market Vectors Semiconductor ETF even as it reached a 13-year high.
optionMONSTER's Depth Charge system detected the purchase of 2,456 October 51 puts for $0.80 yesterday morning. This is fresh buying, as open interest was just 50 contracts before the trade appeared.
The puts could be an outright bearish bet or a hedge to protect a long position in the exchange-traded fund or its component stocks. Intel, Micron, Texas Instruments, and Applied Materials are among the ETF's largest holdings. (See our Education section)
The SMH rose 0.29 percent to close at $51.82 yesterday after reaching $52.08 in the morning, its highest price since June 2001. The fund fell from the $51 level in late July as the broader market sold off, but the stock then bounced sharply at $48.
Yesterday's total option volume in the SMH was 8 times its daily average for the last month. Overall puts outnumbered calls by more than 7 to 1.
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