AI trade rebound sparks flurry of unusually bullish options activity

• Intel saw over 1.3 million options trade (3x monthly average) with $231 million of the $320 million premium tied to calls; stock has rallied 35% from summer lows amid reports of chip manufacturing talks with SK Hynix
• AMD traders executed a bullish spread buying 1,500 November $550 calls worth $8.3 million while selling June $750 calls, breaking even if AMD rallies past $615 by November expiry
• Crowdstrike calls attracted strong demand with the stock up 120% over the past year, while SpaceX saw $1.5 billion in premium traded including major put-selling activity worth over $200 million

Market Summary: AI Trade Rebound Drives Bullish Options Activity

Key Market Movements

The S&P 500 surged over 1% Thursday, posting its best session in six weeks, with 10 of 11 sectors rallying. The CBOE Volatility Index (VIX) dropped more than two points to 15.4, its lowest in a week. Market-makers priced calls at two dollars above puts, signaling strong demand for upside exposure.

Major Company Activity

Intel (INTC) emerged as a standout trade, with volume hitting three times the monthly average at 1.3 million options contracts. The stock trades at July highs, up 35% from summer lows following reports of potential chip manufacturing talks with SK Hynix. Buyers initiated $231 million in calls versus $140,000 in puts, with the most popular contract being the October 2 $115 strike requiring a 7.7% gain to profit.

AMD experienced similar bullish sentiment with volume double the average. Traders bought 107,000 calls versus 71,500 puts. The day's largest trade involved a $8.3 million spread betting on a rally past $615 by November expiration.

Crowdstrike saw strong interest despite being up 120% year-over-year, with traders targeting the $250 Friday expiration call requiring just 2% upside.

SpaceX traded over $1.5 billion in options premium, with $1.1 billion in puts—notably including a $200 million sale of 41,000 puts expiring Friday, indicating bullish put-selling activity.

Market Implications

The surge in bullish options activity across AI-related tech stocks suggests institutional confidence despite regulatory concerns and recent Fed rate hikes, signaling potential continuation of the tech rally.