Options Bulls Bet on Semiconductor Recovery Despite Sector Pullback

Semiconductor equities faced downward pressure today, with the VanEck Semiconductor ETF (SMH) declining approximately 1%. This slump followed a sharp reversal in Qualcomm's early gains, marking one of the sector's steepest single-day drops since late March. Despite the broader retreat, options activity reveals a strong bullish undercurrent. Traders are utilizing call options to bet on a quick recovery, particularly in industry leaders Nvidia and Intel, signaling that the dip is being viewed as a buying opportunity rather than a trend reversal. In Nvidia, a significant $2.2 million trade involved the purchase of 2,168 call options with a $210 strike price expiring May 15. This activity comes as the AI chipmaker recently touched a record high of $212.65. Call options currently outweigh puts by more than two-to-one, with call premiums representing over 80% of the total value traded. Intel is also seeing resilient bullish sentiment following a 100% rally from its previous lows. One notable trader executed a complex call spread, selling 3,000 $60-strike calls to fund the purchase of 10,000 $95-strike calls, both expiring June 18. This specific strategy targets high volatility and requires the stock to exceed $108 by expiry to be profitable. The divergence between spot price action and options sentiment suggests that institutional and retail traders remain optimistic about the AI narrative, even as short-term profit-taking affects the broader semiconductor index.