To The Moon

Despite lower bond yields and the emergence of dip-buying in equities, major U.S. stock indexes rallied collectively, with the S&P 500 rising over 0.8% to set a new record high. Investors appear to be betting on a minor fluctuation in the overall stock market while also seizing opportunities in hot sectors like technology and semiconductors.

• An overview of S&P 500 index options suggests an overall bullish market sentiment. Short-term call options saw active trading, predominantly from sellers opening new positions, likely aiming to collect option premiums.

• Simultaneously, a considerable amount of capital bought into far-dated put options, particularly the June 498 puts, implying bearish bets on a 4.8% decline in the S&P 500 over the next 86 days.

• The semiconductor sector exhibited short-term bullish sentiment. In the options trading of the 3x leveraged semiconductor ETF, large orders aggressively bought the April 48 calls, indicating optimistic expectations for semiconductor stocks in the short term.

• This optimism may be related to recent positive signals from the Chinese government toward the semiconductor industry. China has expressed willingness to strengthen bilateral cooperation with the Netherlands, including in the semiconductor field.

• In detail:

The S&P 500 options showed an overall bullish trading intention, with a frenzy of activity in call options. The highest opening call volume was the $SPY 20240402 524.0 CALL$  , with a strike price of 524 and expiration on April 2nd, seeing 11,100 new openings. The highest opening put volume was the $SPY 20240621 498.0 PUT$ , with a strike price of 498 and expiration on June 21st, seeing 36,800 new openings.

The top put opener, $SPY 20240621 498.0 PUT$ , was a buy order. Calculated from the closing price of 518.81, it implies an expected 4.8% decline in the S&P 500 over the next 86 days.

The top call opener, $SPY 20240402 524.0 CALL$ , was predominantly a sell order.

$Semiconductor Bull 3X Shares(SOXL)$ During trading hours, there was heavy buying of the April 5th expiry call option $SOXL 20240405 48.0 CALL$  with a strike price of $48. This week, Dutch Prime Minister Mark Rutte is on a working visit to China. At a press conference, when asked whether China and the Netherlands would discuss the export of Dutch lithography machines to China, Shu Jueting, the spokesperson for China's Ministry of Commerce, stated that strengthening cooperation between the two countries in various fields, including the semiconductor industry, would benefit China and the Netherlands, as well as China and Europe. It would also positively contribute to maintaining the stability of the global semiconductor industrial chain and supply chain.