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Options Weekly 0112 | Can gold and silver new highs still be chased? Powell controversy challenges Fed independence, CPI and Taiwan Semiconductor earnings reports hit simultaneously—read this article to understand the major opportunities of the week!

This article is from the 'Options Weekly' column, which provides fellow investors with a review of last week's market performance, highlights of the current week's market focus, and analysis of potential options trading opportunities. Welcome!click hereto join the learning journey. You will receive notifications when new updates are available in this column.

Happy Monday, fellow investors~

Against the backdrop of temporarily shelved uncertainties over tariff policies and mixed December US non-farm payroll data — the narrative of a 'soft landing' for the US economy continues to dominate the market. Rate cut expectations remain intact, and risk appetite made a strong comeback last Friday, with all three major US indices closing higher. The S&P 500 once again hit an intraday record high on Friday, coming within striking distance of the 7,000-point mark.

This week is eventful for US stocks: the feud between Trump and Powell reignites, geopolitical tensions push commodities higher, and the US earnings season kicks off this week, with AI narratives continuing to capture attention.。We will continue to provide a systematic review of key events and explore potential options trading strategies.

Trump takes aim at Powell, stepping in personally to push for QE? Keep an eye on CPI data.

According to multiple reports, the US Department of Justice has officially launched a criminal investigation into Federal Reserve Chair Powell.The core reason for the investigation involves financial issues related to the renovation of the Fed's Washington, DC headquarters and whether false statements were made to Congress, but the market widely believes that it stems from significant political pressure from the White House.

Powell stated he will continue to fulfill his duties,The threat of criminal charges arises from the Fed’s commitment to setting interest rates based on assessments of public interest rather than following the president's preferences.Since Trump's re-election as president, dissatisfied with the Federal Reserve’s slow pace of interest rate cuts, he has repeatedly publicly criticized Powell.

In addition to investigations targeting the Federal Reserve Chair personally, Trump has also attempted to intervene in market interest rates through unconventional means. He announced on social media thathe will instruct Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS) to lower housing mortgage rates.

The Fed had also purchased MBS during previous rounds of QE, but this time it was not initiated by the Fed; instead, it was directed by the executive branch to directly intervene in housing financing costs.

Looking at key data,the US Bureau of Labor Statistics will release the December 2025 US CPI at 21:30 Beijing Time on Tuesday.The market broadly expects the December CPI year-over-year growth rate to be 2.70%. Last Friday, the US Supreme Court did not announce its ruling on Trump's tariffs,and this Wednesday (the 14th) will be the next date for announcing the ruling (the institution does not pre-announce items to be released),fellow investors may also stay tuned.

Opportunity Analysis

Following the news of the criminal investigation into Powell, concerns about the Fed’s independence being challenged led to a drop in both the dollar and US stock futures.

While lower interest rates and increased liquidity support valuations, the criminal investigation into the Fed chair and the government bypassing the Federal Reserve are rare precedents, suggesting that the logic behind monetary policy formulation may undergo a fundamental distortion.

As Powell is about to step down and Trump is set to announce his pick for the next Fed chair this month, the sudden launch of a criminal investigation into Powell serves both as pressure on him to pivot towards looser policies in the final window of his term and as a warning to future appointees to make the Fed more subservient to the White House.

The current U.S. MBS market is worth trillions of dollars, and the short-term impact of $200 billion in MBS purchases is relatively limited. However, this signifies that there is now an additional tool in the U.S. policy toolkit to influence asset pricing by circumventing traditional monetary policy channels.

All in all, the risk of 'de-independence' in U.S. monetary policy is sharply increasing, and the collective rally of global risk assets since the beginning of the year, with significantly suppressed volatility, is likely to amplify.

CPI data could also disrupt the markets. Morgan Stanley forecasts a significant rebound in core U.S. CPI for December, primarily due to statistical distortions during the government shutdown, but it remains on a mild downward trajectory in the long term.Analysts worry that the market may interpret this as 'inflation making a comeback,' which could trigger fluctuations in asset prices.Interest rate futures market data shows a 95% probability that the Fed will remain on hold in January.

Options strategy

Volatility analysis tools indicate that even after the first full trading week of 2026, market volatility remains extremely low. $SPDR S&P 500 ETF (SPY.US)$ The IV level and percentile are both in single digits, $Invesco QQQ Trust (QQQ.US)$ Volatility is slightly higher but still at a historical low, favorable for option buyers to deploy strategies.

(SPY on the left, QQQ on the right)

(1) Going long volatility: Buying a Long Straddle/Strangle

Simultaneously buying Call and Put options allows for profit as long as the stock price deviates significantly from the strike price. When market consensus is mixed or expected volatility is high, this strategy captures opportunities in both upward and downward directions, avoiding the risk of one-sided bets. This week, with a dense schedule of macro events still unfolding, deploying a long volatility strategy is more suitable.

(2) Insuring positions: Protective Put

Considering the potential sell-off triggered by the Powell event and geopolitical risks such as those in Iran, if the current position is heavy, measures can be deployed to address downside exposure. By purchasing out-of-the-money put options corresponding to the holdings, you pay a premium if the market rises, but if a black swan event occurs, it can hedge against downside risk.

From Venezuela to Iran, geopolitics reshapes precious metals pricing

The recent geopolitical storm has escalated from isolated conflicts to sector-wide resonance. The U.S.'s sovereignty claim over Greenland and Trump’s 'military intervention' warning, coupled with Iran's potential supply disruption risks, have become core variables driving significant fluctuations in commodities. Precious metals and energy sectors are particularly sensitive.Market focus has shifted from Venezuela to Iran. The former once caused a brief pullback in oil prices after Trump stated that no further action would be taken, but Iran, as a larger oil producer and exporter, could have a much greater impact from potential supply disruptions than Venezuela.

Opportunity Analysis

Frequent geopolitical events primarily affect the following three sectors: precious metals being the most direct, with gold on Monday$XAU/USD (XAUUSD.CFD)$ , silver $XAG/USD (XAGUSD.FX)$ Rebound,Short-term precious metals rise due to escalating uncertainties in geopolitics.The central bank's rigid gold purchases are accelerating inflows; a new Fed Chair may bring stronger easing expectations (such as faster rate cuts, more aggressive monetary easing) supporting price increases;

Short-term chaos in the crude oil market and potential supply disruptions from Iran are keeping oil at a high risk premium. Oil service stocks (e.g., $Chevron (CVX.US)$ ) benefit from expectations of the U.S. taking over Venezuelan facilities,and since oil traders have been holding large bearish bets, if geopolitical tensions force these positions to unwind, the market may face a sharp reversal.。This week, trading volume in Brent crude call options rose, reflecting market participants hedging against potential price spikes.

Defense stocks also benefit from Trump’s recent comments on increasing military budgets,with plans to significantly increase U.S. defense spending by 50% by 2027. Whether considering inventory depletion (war of attrition logic) or strategic deterrence (nuclear submarines, missile defense), the valuation center for defense stocks (e.g., $RTX Corp (RTX.US)$ , $Lockheed Martin (LMT.US)$ ) is shifting upwards.

Options strategy

As for the precious metals market that many investors are focusing on, despite strong long-term fundamental support, as traders, we must be cautious of the following short-term risks: the current bullish positions in gold and silver are at historical extremes. If geopolitical tensions ease temporarily (for example, if the situation in Iran does not escalate), profit-taking at high levels could lead to a sharp correction in gold and silver prices.

Silver's previous excessive rise has already priced in some positive factors.The gold-to-silver ratio has fallen to a 10-year low.(The gold-to-silver ratio = gold price ÷ silver price, reflecting the amount of silver one ounce of gold can exchange for, which is an important relative valuation indicator in the precious metals market).If this balance cannot be maintained going forward, there is a risk of a correction after overbuying; if the silver price continues to soar in a short period, it may trigger exchanges to increase margin requirements (Margin Call), which historically has led to multiple silver crashes.

Current$SPDR Gold ETF (GLD.US)$ and $iShares Silver Trust (SLV.US)$The characteristics of options areImplied Volatility (IV) is extremely high.。 $SPDR Gold ETF (GLD.US)$'sThe IV percentile is at 83%,$iShares Silver Trust (SLV.US)$and the IV percentile has even reached 96%,which means the option premium is very expensive. Naked buying of Call options not only requires betting on the right direction but also on the magnitude, with a low probability of success. If the market moves sideways, the erosion of time value will be severe.

(1) Bull Call Spread — Suitable for a moderately bullish outlook on gold

Since buying Calls directly is too expensive, we can simultaneously buy in-the-money (ITM) or at-the-money (ATM) Calls while selling an out-of-the-money (OTM) Call with a higher strike price. This significantly reduces holding costs and offsets some of the risk from a decline in implied volatility (IV). Even if gold consolidates at high levels without a significant drop, there's still an opportunity to profit; not only does this reduce premium expenses, but it also mitigates some risks associated with 'volatility regression.' The maximum loss is the net premium paid, but upside potential is limited.

(2) Sell Put — Suitable for long-term optimism and willingness to accumulate on dips

If you're willing to buy gold on pullbacks, then using high IV to sell Puts is the best choice now, as it allows you to collect substantial premiums. For example, selling GLD OTM Puts (with strike prices set near key support levels, such as moving averages). If gold doesn't fall, you pocket the premium (which offers very high annualized returns); if it falls below, you passively build a position at a lower cost than the current price, aligning with the 'buy-the-dip' strategy.

(3) Ratio Call Spread — Suitable for expecting moderate gains or slight fluctuations in silver

Silver has strong breakout potential, but its options carry high premiums, and current valuations may indicate overbought risks, which could result in deeper corrections. By leveraging market enthusiasm for call options, we sell more OTM Calls to finance our ATM Calls. For example, buy SLV ATM Calls and sell two OTM Calls (strike prices should be set above strong resistance levels). Compared to a regular bull call spread, this strategy further reduces costs, potentially achieving 'zero-cost.'

However, note that this strategy performs exceptionally well during moderate silver rallies or early stages of explosive moves. But if silver experiences an epic short squeeze (infinite rise), the naked sold Call will carry risks, requiring strict stop-losses or covered positions.

The US earnings season is about to begin, with Taiwan Semiconductor kicking off the tech sector.

$Taiwan Semiconductor (TSM.US)$ As the global leader in semiconductor foundry services, its earnings have always been a barometer for tech stocks.The company has released preliminary December 2025 and Q4 revenue figures and will announce full earnings and 2026 guidance on January 15, firing the first shot of the AI sector for this earnings season.

Opportunity Analysis

Taiwan Semiconductor's revenue is already well-known. Last week, the company announced its December 2025 revenue at NT$335.03 billion, a year-on-year increase of 20.4%. The total revenue for the fourth quarter was approximately NT$1.05 trillion (about $33.1 billion), marking a year-on-year growth of 20%, surpassing market expectations.

The market is closely watching the progress of the 2nm process.The 2nm process entered mass production in Q4 2025 and is expected to start contributing revenue by Q3 2026.Its revenue potential is enormous, with expectations to surpass the combined revenue of the 3nm and 5nm processes in Q3.It is considered key to the company’s future growth and maintaining its technological leadership.

Additionally, although there were earlier reports that $Apple (AAPL.US)$ some chip orders might be transferred to $Intel (INTC.US)$ , as well as $Qualcomm (QCOM.US)$ and news of Samsung negotiating with them over the 2nm process. However,in the short term, neither Samsung nor Intel can shake Taiwan Semiconductor's dominance in advanced processes; their advanced capacity for 2026 has already been fully booked.In terms of capital expenditures, the market expects Taiwan Semiconductor's 2026 capital spending guidance to be around $47 billion. The company will remain cautious, but any unexpected increases would benefit the semiconductor equipment sector.

Options strategy

The current implied volatility (IV) is 41.67%, higher than the historical volatility, indicating that option pricing incorporates event risk expectations. However, part of the full-year performance has been priced in, and IV has slightly retreated from its peak. Typically, IV will rapidly decline after earnings release ('IV Crush').

The Put/Call Ratio of open interest stands at 1.72, showing a significant rise compared to the previous earnings day, reflecting a surge in hedging demand amid concerns over an AI bubble. Observing the open interest for the nearest two expiration dates, most put options are concentrated at the $300 strike price.

(1) Bull Call Spread

Suitable for moderately bullish investors. It involves simultaneously buying call options with a lower strike price and selling call options with a higher strike price, which reduces premium costs, lowers the breakeven point, but caps potential profits. The risk lies in the possibility of losing the entire cost if the stock price falls, and missing out on outsized gains if the stock surges.

(2) Selling Cash-Secured Puts

Suitable for investors optimistic about long-term fundamentals and willing to buy at a specific price. By selling put options, premiums are collected; if the stock price does not fall below the strike price, the premium is earned. If it falls below, shares must be bought at the strike price, allowing for discounted entry. This strategy can capitalize on high IV before an event and benefit from IV decay.

AI sector rotation: How to position?

The AI sector is showing a structurally differentiated trend, as evidenced byCyclical sectors strengthening, momentum factor spiking, but large-cap tech stocks showing divergence. Capital is rotating from core AI computing power towards power/analog/storage sectors.Last week's CES 2026 concluded with major tech CEOs unveiling bold strategies, triggering consecutive surges in related stocks such as Intel, Micron, and SanDisk.

Opportunity Analysis

(1) Intel:

$Intel (INTC.US)$ Rapid rebound from the low of $34.95 to $45.55 after Christmas, with a gain of over 30%. Market bullish sentiment is high and implied volatility (IV) remains elevated, currently sitting at an astonishing 85th percentile historically, with an absolute value near 70%, significantly surpassing the historical volatility of 57.45%. The Put/Call volume ratio is 0.54, indicating bullish sentiment dominance. Near-term option open interest is concentrated around the $60 strike price, with substantial bullish positions also clustered at $50, creating short-term resistance.

The moving average system shows a bullish arrangement technically, but the short-term RSI may enter the overbought zone, facing profit-taking pressure.Support is noted in the $40-$37 range.With high bullish sentiment and elevated IV, if the stock price stabilizes above $40, it could attract more bullish option bets.

(2) Micron:

The memory sector has been aggressively chased by market capital recently due to favorable supply-side price hikes amid a supply-demand gap. $Micron Technology (MU.US)$ After reporting impressive Q4 earnings, implied volatility remained persistently high, reflecting market sensitivity to post-earnings volatility and changes in supply-demand dynamics within the memory industry. On January 9, call option volume reached 334,700 contracts > put option volume of 189,600 contracts, with a Put/Call ratio of 0.57, showing active short-term bullish trading. Open interest distribution for calls vs. puts remains relatively balanced, with a Put/Call ratio of 1/28.Indicating significant market divergence in opinions.。

(3) NVIDIA:

Last week's newsletter mentioned that currently $NVIDIA (NVDA.US)$ there is a large amount of near-term expiring and still open call and put options concentrated at $190, which poses strong resistance for NVIDIA’s upward breakout. Last week, NVIDIA did not announce any new products at the CES conference, and after briefly breaking through $190 at the start of the event, it retreated continuously, with the stock price eventually closing below $185.

The current implied volatility (IV) remains at a low level, in the 15th percentile over the past year.This means that the premiums for options are still relatively 'cheap'.

Options strategy

For stocks with different characteristics, differentiated options strategies can be considered:

(1) Stocks that have surged in the short term and have solid fundamentals (e.g., Intel, Micron):

Covered Call: If you already own the underlying stock, you can sell call options near the resistance level to collect substantial premiums, enhancing returns. The risk is that if the stock price surges beyond the strike price, you may miss out on additional gains, and downside protection is limited.

Cash-Secured Put: If you are looking to enter a position, you can take advantage of the current high IV by selling put options at key support levels to collect premiums. If the stock price does not fall below the strike price, you earn the premium; if it falls below, you buy the stock at your target price.

(2) Stocks with bullish-bearish divergence and a bias towards bullish views:

Ratio spread strategy: For example, buy one at-the-money call option while selling two out-of-the-money call options with higher strike prices. Cover the cost by selling more options to profit from moderate stock price increases. The risk is that if the stock price rises sharply, the sold options could lead to unlimited losses; if the stock price falls, the loss will be limited to the initial net expenditure.

(3) Low volatility, long-term optimistic stocks (e.g., NVIDIA's current state):

Long-term Equity Anticipation Securities (LEAPS Call) strategy: Buy long-term (usually over 1 year), deep in-the-money call options as an alternative to holding the underlying stock for long-term positioning. These options have high Delta values, allowing them to capture most of the upside gains as the stock price rises, while the maximum loss is limited to the premium paid. This strategy suits investors who are optimistic about long-term prospects but want to control downside risks and improve capital efficiency.

Brian Wong Huang Zi Zheng

Futu Investment Strategy Expert

CE: BBH085

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Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or any guarantee of any securities, financial products, or instruments. The risk of loss in buying and selling options can be substantial. In some cases, the losses you incur may exceed the initial margin amount deposited. Even if you set contingent orders, such as “stop-loss” or “limit” orders, they may not necessarily prevent losses. Market conditions may make these orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any deficit balance in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures upon exercising options and at expiration, as well as your rights and obligations when exercising options and at expiration.

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