Direxion Daily Semiconductors Bull 3x Shares (SOXL) is showing a strong recovery in pre-market trading on Wednesday, soaring 5.20% after experiencing a significant drop the previous day. This dramatic turnaround comes amidst a volatile market environment and high options activity for the leveraged ETF, suggesting a potential shift in investor sentiment towards semiconductor-related stocks.
The pre-market surge follows a challenging Tuesday session where SOXL had plummeted nearly 10% as the broader market, particularly the technology and semiconductor sectors, faced heavy selling pressure. The S&P 500 had closed below 5,000 points for the first time in almost a year, reflecting widespread investor concerns. However, the current pre-market rebound indicates that traders may be positioning for a recovery in the semiconductor space.
Options market data from Tuesday showed considerable interest in SOXL, with 607,900 contracts traded. Notably, call options accounted for 68% of the overall option trades, indicating bullish speculation. The high volume for the $15 strike call option expiring April 11 further supports the notion that some traders were anticipating a potential rebound. This optimism appears to be materializing in Wednesday's pre-market session, as SOXL leads what could be a broader recovery in semiconductor-related stocks.
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