Daily Options Selling Strategy | Is the AI chip rally back? The triple-leveraged semiconductor ETF (SOXL) surged violently by 14% in the previous trading session—what should options sellers do?

I. Market Barometer

All three major U.S. equity indices rose in the previous trading session, with the semiconductor sector staging a strong rebound after the prior day's decline, $Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$ surging 14.03% in a single day, offering a window of opportunity for options selling strategies amid heightened volatility.

II. Focus on Hot Targets

$Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$ : Capital is bottom-fishing, driving a violent rebound of over 14%

$Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$ SOXL closed at $173.20 in the previous session, up 14.03%, with a turnover rate of approximately 43.65%, reflecting strong investor appetite to buy the dip.

SOXL’s rally was driven by several key factors.

First, CPUs led a broad-based rally across the chip sector.Yesterday, the CPU sector surged as AI shifted from training to inference, with the CPU-to-GPU ratio moving from 1:8 toward 1:4 or even 4:1, $Arm Holdings (ARM.US)$ 、 $Advanced Micro Devices (AMD.US)$ 、 $Intel (INTC.US)$ leading the chip sector higher.

Second, bullish sentiment around AI peaked ahead of NVIDIA’s earnings announcement.After-hours $NVIDIA (NVDA.US)$ Q1 earnings were released, with capital positioning ahead of time betting on results exceeding expectations.

Third, macro sentiment improved yesterday, boosting risk appetite.Expectations of easing tensions in the Middle East have grown, leading to a sharp drop in oil prices that alleviated inflation concerns. U.S. Treasury yields retreated, reducing valuation pressure on growth-oriented tech stocks.

From a technical perspective, SOXL found support at the 20-day moving average after dipping to a low of $135 on Tuesday, rebounding above this level. It then gapped up sharply on strong volume yesterday and closed firmly above $173. The current price sits above the 5-day, 10-day, and 20-day moving averages, indicating a short-term phase of strong recovery.

However, note that yesterday’s trading volume contracted compared to the previous session, showing a bullish price movement accompanied by declining volume—a divergence signal suggesting potential near-term volatility. Resistance lies at the prior high of $191.29, while support is in the $130–$150 range.

III. Seller Options Strategy

1. Covered Call

Hold 100 shares of SOXL stock and sell one SOXL May 22, 2026 $190 call option.

Opportunity filtering logic:

For investors who already hold $Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$ SOXL, after enduring the prior decline and yesterday’s violent 14% rebound, the stock now faces technical resistance near the previous high of $191 in the short term. While investors remain confident in the long-term secular tailwinds for the semiconductor industry driven by AI computing demand, they are concerned about the stock oscillating near historical highs, which could erode unrealized gains.

In this scenario, selling a covered call allows investors to collect substantial option premium, thereby lowering their cost basis. If the stock consolidates sideways from current levels, the premium income can effectively offset time decay. If the stock continues its strong upward move and gets called away above $190, it would effectively lock in profits near the target level of the prior high.

2. Cash Secured Put

Sell 1 SOXL June 18, 2026, $100 Put; estimated required margin (for reference only): $10,000 ($100 × 100)

Opportunity filtering logic:

For investors who do not yet hold a position but wish to strategically enter the semiconductor sector on dips, SOXL has exhibited sharp volatility following a record high. Chasing the rally directly carries near-term risk of being trapped in a losing position. However, the sector as a whole remains in an upward fundamental cycle driven by AI computing demand, with NVIDIA and other leaders consistently delivering better-than-expected earnings, and the structural demand thesis remains intact.

By selling a put, if the stock price continues to rebound or trades sideways at current elevated levels, the investor can collect premium income to enhance returns on idle capital. If the price pulls back toward the $100 strike price, the investor can also acquire the shares at a lower cost, thereby establishing exposure to this high-growth sector at a more favorable and safer entry point.

IV. Risk Control Reminder

Although the seller strategy has a high probability of success, investors must still manage risks effectively:

– Position management is key:The biggest risk for option sellers lies in black swan events. It is recommended that margin exposure for a single underlying should not exceed 20% of total capital. Never sell options beyond your capacity for the sake of greedy premiums.

– Timely rolling of covered call options: When a covered call option becomes deeply in-the-money (stock price far exceeds the strike price), and if the underlying stock is still viewed favorably, decisively 'roll' the position — that is, close the current option by buying it back and simultaneously sell an option with a later expiration date and a higher strike price to avoid having the stock called away at a low price.

– Cash-secured put options warn of 'left-tail risk':For cash-secured puts, if the stock price collapses due to deteriorating fundamentals (rather than a normal pullback), do not hold on stubbornly. At this time, stop losses should be executed, or 'rolling down' can be employed to buy time and wait for volatility to normalize.

Make good use of the options seller zone to understand the income strategies for selling optionsEarn option premiums!

Options Risk Warning

An option is a contract that grants the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or at any time 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 expectations for the level of volatility in the option over a future period. It is a data point derived inversely from the Black-Scholes option pricing model and is generally regarded as an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay a higher price for options to hedge risks, resulting in higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage risk exposure.

Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses incurred may exceed the initial margin deposited. Even if you set contingency orders, such as 'stop-loss' or 'limit' orders, these may not necessarily 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 resulting from such liquidation. Therefore, before trading, you should study and understand options and carefully consider whether such trading suits 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 expiration. Options trading involves extremely high risks and is not suitable for all investors. Investors should read Characteristics and Risks of Standardized Options carefully before engaging in any options trading strategy.

Editor/Doris

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