Traders are loving this cheap way to make big bets against chip stocks
A trader works at the New York Stock Exchange (NYSE) in New York City, USA, on June 18, 2026.
Jeenah Ay | Reuters
Just a day after setting new all-time highs, the semiconductor industry is down nearly 7% and investors are finding a cheap way to bet on a larger pivot.
Option volume entry Direxion’s three-pronged inverse semiconductor ETF (SOXS) It’s more than three times the daily average last month, and calls are outpacing by a margin of more than six to one, according to data from ThinkOrSwim.
Betting on the upside for the fund means betting on the downside for the chips, as the fund targets 300% of the daily upside move in the NYSE Semiconductor Index. The popularity of leveraged ETFs has exploded in the past year amid a massive run on chip stocks, with daily rebalancing flows regularly exceeding $20 billion, according to an analysis from Barclays stock tactical strategies.
Direxion Daily Semiconductor Bear 3X Stock, YTD
At just over $4 per share, the ETF offers investors an inexpensive way to speculate on the direction of the market’s most important sector. Approximately 260,000 options are traded compared to 172,000 options on the VanEck semiconductor ETF SMH.
More than 84,000 puts were purchased in early trading on Tuesday, while just under 15,000 puts were purchased. Selling calls as well as calls suggests investors can hedge bullish bets on the ETF through spreads that will limit upside if the fund posts further gains, such as today’s 24% rally.
According to SpotGamma data, eight of the top 10 contracts in terms of volume are calls, with profitable 4-strike and 3.5-strike calls expiring on Friday being the most popular.
The biggest trade of the session so far was the sale of 300 of the 13-strike puts that expire in January 2028, bringing in $327,000. Selling at the profit is a way for investors to obtain a “synthetic” long position in the underlying security at a lower cost than buying the stock outright.
