To The Moon

On Wednesday, a series of bafflingly large bearish orders emerged targeting the AI sector. The scale of these new put option purchases was astonishing, reaching tens or even hundreds of millions of dollars, with a timeframe pointing to before the Lunar New Year.

The underlying assets involved include TSMC, Oracle, Broadcom, and the semiconductor ETF SOXX:
$TSM 20260220 330.0 PUT$ 
$TSM 20260220 320.0 PUT$ 
$ORCL 20260213 160.0 PUT$ 
$AVGO 20260320 240.0 PUT$ 
$SOXX 20260220 310.0 PUT$ 

The timing of this large bearish bet on TSMC, in particular, is awkward. It's possible the shorts anticipated a "sell the news" reaction after Thursday's earnings, but TSMC's results significantly exceeded expectations.

For now, there isn't a clear bearish thesis. Let's mark this activity and continue to monitor.

$NVDA$

Based on recent put option activity, the outlook for NVIDIA next week, and even through mid-February, is not particularly positive, with expectations for a potential pullback to 160. Again, the bearish reasoning remains unclear.

$TCOM$

On Wednesday, Ctrip's stock plummeted 17% following news of an antitrust investigation. While core operations are reportedly unaffected for now, the long-term outcome of the investigation—potential fines, mandated changes, and whether Ctrip can maintain its 72% market share post-remediation—remains highly uncertain. Overall, it appears Ctrip may struggle to find a bottom for at least several months.

Theoretically, the negative news might be largely priced in the short term. Selling short-dated puts could be a way to bet on a decline in the extreme volatility. However, the risk of assignment remains.

Currently, for expiries within one month, put option open interest is concentrated in the 50-60 strike range. Selling volatility might be considered below 50.

Personally, I'm passing on this one. Other opportunities seem more compelling at the moment.

$JPM$

The banking sector sell-off gave this earnings season a rough start, but TSMC's results helped salvage sentiment.

The drop in bank stocks also presents an opportunity. JPMorgan has fallen to its 120-day moving average, attracting several medium-term sell put orders, such as $JPM 20260417 275.0 PUT$ . This could be worth exploring for those interested.