Daily Options Outlook | Alibaba rises 1.8% in pre-market trading; Lumentum down 1.69%; Micron Technology drops 5.95% as Samsung strike exacerbates memory chip shortage

Today's Options Opportunity Preview

On the individual stock level, $Alibaba (BABA.US)$ Up 1.82% in pre-market, Alibaba is set to launch the preview version of its Qwen3.7 Max large AI model. Options market data shows Alibaba’s put/call volume ratio at 0.26, implied volatility (IV) at 43.74%, and IV percentile at 41%, reflecting market expectations that AI and cloud services will drive Alibaba’s stock higher.

The memory/storage sector broadly pulled back, $Micron Technology (MU.US)$ Down 1.32% in pre-market, $SanDisk (SNDK.US)$ Down 2.63%. A former Samsung executive stated Chinese firms will drive down memory prices next year. Options signals show SanDisk’s put/call volume ratio at 1.04, indicating the market is using put options to hedge existing long equity positions.

$Lumentum (LITE.US)$ Down 1.5% in pre-market. Options market data shows LITE’s put/call volume ratio at 1.21 and IV percentile at 62%, reflecting significant short-term downside protection being purchased via put options.

Review of yesterday's options market

Index Options

On May 18 (Eastern Time), U.S. equity index options trading volume rose, with a total of 7.68 million contracts traded. The put/call volume ratio declined to 0.92.

As the upcoming expiration date approaches,$S&P 500 Index (.SPX.US)$ Options volume distribution showed the following characteristics: peak put volume occurred at the 7,350 strike, while peak call volume was at the 7,460 strike.

Single Stock Options

$Netflix (NFLX.US)$Closed up 3.02%, with 445,200 options contracts traded; the put/call volume ratio dropped to 0.26. Bank of America Securities maintained its Buy rating on Netflix with a $125 price target, highlighting the company’s advertising business growth and potential in live sports streaming expansion.

$Micron Technology (MU.US)$Closed down 5.95%, with 657,100 options contracts traded; the put/call volume ratio fell to 0.84. Micron Technology’s stock rose amid heightened concerns over a Samsung strike exacerbating memory chip shortages.

Top list of options trading volume

Among the top 10 stocks by options trading volume,$Intel (INTC.US)$Had the highest put/call volume ratio, reaching 0.85. Intel and Qualcomm are interested in acquiring AI chip startup Tenstorrent, which could be valued at over $5 billion.

The highest put/call open interest ratio is$Micron Technology (MU.US)$, reaching 1.26.

Implied volatility rankings (underlying market cap > $10 billion and options trading volume > 100,000)

$POET Technologies (POET.US)$Implied volatilityReached the highest level at 174.77%, down 10.44% from the previous trading day. POET Technologies completed a $400 million financing round and signed an initial $50 million order with Lumilens.

$T1 Energy (TE.US)$Implied volatility rose the most, reaching 130.26%, up 8.52% from the previous trading day. Situational Awareness Fund disclosed a new position in T1 Energy shares, driving the stock price up 17.8% to $6.68.

Risk Warning

An option is a contract that gives the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or before that date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility.

Implied volatility reflects the market's expectation of the option's volatility over a certain period in the future. It is derived inversely from the BS pricing model of options and is generally considered an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay higher prices for options to hedge risks, resulting in higher implied volatility.

Traders and investors use implied volatility to assessOption priceto enhance attractiveness, identify potential mispricing, and manage risk exposure.

Disclaimer
This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses may exceed the initial margin deposited. Even if you set contingent orders such as 'stop-loss' or 'limit' orders, these may not prevent losses. Market conditions may make such 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 shortfall 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 for exercising options and the rights and obligations upon exercise and expiration. Options trading carries extremely high risks and is not suitable for all investors. Investors should carefully readCharacteristics and Risks of Standardized Options。

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