Daily Options Seller Strategy | Korean Equity Rout Drags Down Memory Sector! DRAM Pulls Back Premarket—How Should Options Positions Navigate Sharp Volatility in the AI Trade?

I. Market Barometer

Major U.S. equity indices closed mixed last night, but during today’s Asian trading session, South Korea’s stock market was hit by a 'Black Tuesday'— $Korea Composite Index (.KOSPI.KR)$ plunging nearly 10% intraday and triggering a circuit breaker.

Memory chip giants led by Samsung Electronics and SK Hynix both tumbled sharply, $Roundhill Memory ETF (DRAM.US)$ dropping over 12% in premarket trading as profit-taking pressure mounted from recent highs. In this high-volatility environment, how should options sellers adjust their strategies?

II. Focus on Hot Targets

DRAM: Pure-play memory ETF under pressure at elevated levels; memory leaders’ plunge drags down premarket performance

The world’s first pure-play memory ETF— $Roundhill Memory ETF (DRAM.US)$ pressured by the sell-off in Asian memory stocks, traded significantly lower in U.S. premarket hours today. DRAM briefly hit an all-time high during yesterday’s session before pulling back modestly amid intense investor positioning.

From a technical perspective, DRAM has posted substantial gains since its April listing, with moving averages previously in bullish alignment. After climbing steadily to record highs, clear signs of technical overbought conditions had emerged. Today’s premarket selloff, triggered by external shocks, could prompt a retest of key prior support levels.

On the news front, today's sharp sell-off in South Korean equities has become the central narrative for the global memory storage sector. The KOSPI index plunged 9.99% to close at 8,203.84 points, weighed down by heavyweight stocks SK Hynix and Samsung Electronics.

The sharp decline in South Korean equities stems from multiple factors. First, the market had already shown clear signs of overheating after repeatedly hitting record highs. Lee Jae Mahn, strategist at Hana Securities in Seoul, noted that several overheating signals have recently emerged in the Korean stock market, including SK Hynix trading at a higher valuation than Samsung Electronics. Second, the head of South Korea’s Financial Supervisory Service expressed 'regret' over leveraged ETFs and is considering stability measures, directly dampening bullish sentiment. Third, renewed concerns about Federal Reserve rate hikes have intensified, weighing on AI-related technology stocks.

Market attention is currently focused on this week’s $Micron Technology (MU.US)$ earnings reports, which are seen as a 'litmus test' for the true strength of AI hardware stocks. In addition, elevated leverage and margin balances among retail investors have amplified losses during the market’s downturn.

The global memory sector is currently undergoing a rapid shift in sentiment—from 'extreme optimism' to 'short-term panic'—with pre-market DRAM performance serving as a concentrated reflection of this shift. DRAM’s previous strong performance was rooted in the 'bottleneck' role of memory chips within the AI infrastructure expansion wave. DRAM holdings are heavily concentrated among core memory manufacturers such as SK Hynix, Samsung Electronics, and Micron Technology. The underlying fundamentals of tight supply-demand dynamics in the memory market have not yet shown significant change.

III. Seller Options Strategy

1. Cash Secured Put

Sell 1 contract of $Roundhill Memory ETF (DRAM.US)$ Sell DRAM July 17, 2026, $60 Put; estimated required margin (for reference only): $6,000 ($60 × 100)

Opportunity Rationale:

For investors who believe in the long-term structural growth of AI-driven memory demand but have not yet established positions, today’s pre-market selloff—triggered by sentiment spillover from South Korea—may offer a window to observe potential entry points amid short-term panic. The core investment thesis for the memory sector—the inflexible demand for memory driven by AI computing power and persistently tight supply conditions—has not fundamentally changed due to profit-taking in South Korean equities.

By selling put options, investors can collect premium income in this high-volatility environment if prices stabilize after the short-term panic subsides. If prices decline further toward the strike price, they may also gain the opportunity to establish a position at a more prudent cost basis.

2. Covered Call

Holding 100 shares $Roundhill Memory ETF (DRAM.US)$Underlying stock: Sell 1 contract of DRAM July 17, 2026, $105 Call

Opportunity Rationale:

For investors already holding DRAM with substantial unrealized gains, the stock has experienced a sustained rally since its listing and today’s sharp volatility triggered by external shocks. Short-term sentiment recovery will take time, and prices at these elevated levels may face heightened two-way volatility.

If investors remain bullish on the long-term thesis of the AI memory bull market but are concerned about short-term profit-taking exacerbating sell-offs amid panic sentiment, they can sell call options. If the price consolidates around current levels, the option premium received can effectively hedge against drawdowns; if the price rebounds near the strike price and the option is exercised, it effectively locks in profits at the target level.

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 underlying asset at a predetermined price on or before a specified date. Option prices are influenced by multiple 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 future price fluctuations over the life of the option and is derived by reverse-engineering the Black-Scholes pricing model. It is commonly used as a gauge of market sentiment. When investors anticipate greater volatility, they may be willing to pay higher premiums for options to hedge risk, leading to elevated implied volatility. Traders and investors use implied volatility to assess the relative 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.

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