Traders work during Hawkeye 360’s initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) on Thursday, May 7, 2026 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
Stock bulls showed resilience in the face of what could have been the worst decline of the year. Nasdaq 100 Since March, the index has gained 1.5% intraday to close; S&P500 It ended Tuesday down less than 12 points.
This confusion has helped options traders sort out where they have the most confidence.
Most notable is the volatility of the S&P 500 index. CBOE VIX Index The index briefly rose to 19.01 on the day, its highest since April 28, but fell on the day. This is the latest example of the divergence in volatility between a benchmark index and its individual components, which has seen wide swings and higher option prices.
CBOE Volatility Index Year-to-date
The weakness in the VIX probably provides a hedging opportunity that looks cheap compared to the 2.5x higher volatility of semiconductor stocks. The trade appears to have received some attention on Tuesday, as VIX options were the 10th most actively traded option with four times as many calls as puts bought.
“We are looking to hold June VIX calls as a hedge in case oil prices rise above $100,” Brent Kotuba, founder of options data provider Spot Gamma, said in a note to clients Tuesday morning.
Tech stocks such as Qualcomm, Intel, and memory stocks have recently posted sharp pullbacks as oil prices rose above $102 and the 10-year Treasury yield hit its highest level since July.
High-tech ETF option flow SMH, QQQ and drum Although the bullish shift for all three has slowed, with each selling more calls than buying, the total premium is still tilted toward calls for all three, especially in DRAM. At SMH, put selling exceeded buying.
The bearish outlook was more pronounced in bonds, with active call selling and put buying. iShares Long Term Bond ETF (TLT)fell by two-thirds of a percent to its lowest level in nearly a year, after CPI data showed the highest reading in nearly three years.
Traders bought more than 151,000 TLT puts, sold just 97,000 and bought fewer than 76,000 calls, according to ThinkOrSwim data. One trader spent more than $1 million buying 24,000 July 1981 puts, hoping for a decline of at least 5% in two months.
According to Spot Gamma, just under 600,000 ETFs were traded on the day, making it the 13th busiest ticker during trading hours.
