To The Moon

I. Fundamentals: Long-Term Visibility Improves, Valuation Attractive

SK Hynix is signing more amended long-term agreements with hyperscale data center customers, covering both DDR5 and NAND. Contract terms exceed five years, with approximately 60–70% of expected volume/pricing already locked in, significantly boosting future earnings visibility — this serves as micro-level confirmation of the large-capex-backed memory storage thesis.

This earnings report is expected to deliver unprecedented operating profit exceeding 100 trillion won. Yet, with such strong expectations, the stock has still plunged dramatically, indicating that near-term market sentiment has completely broken down.

II. Volatility Estimates and Scenarios

Monday's pre-market reference price was 154.57, with implied movement of ±14.39% (range 132–177). The stock has since sold off consecutively — 154.57 (7/24) → 143 (7/27) → currently ~131, having already broken through the key 135 Put wall.

Recalculating at current price ~131 and IV 129%, the implied move for this week (7/31) is approximately ±13%, with a range of roughly 114–148. The center of gravity has shifted from 135 down to ~125.

Post-earnings price movement expectations:

• In-line results + IV crush: struggling in the 125–135 range, with a center of gravity around 126–130.

• Beat expectations / confirmation of sector strength: rebound reclaiming 135 → 140/144, with strong upside to 150.

III. Block Trade Analysis: Sentiment Has Broken

• Sell Put players are retreating: The original 7/31-expiry 135 Sell Put was rolled → selling the 8/7-expiry 125 Put$SKHY 20260807 125.0 PUT$ . Lowering the strike (135→125) and extending expiration is a classic defensive concession move — capital that was originally betting on holding 135 has now revised expectations down to merely defending 125.

• Heavy bets placed on a sharp drop: This week's 95 Put $SKHY 20260731 95.0 PUT$ surged by +26,000 contracts in a single day (27% below current price), alongside heavy open interest accumulation at 120/110/105. The Put/Call OI ratio stands at 4.61, with net Put additions exceeding Calls by 128,000 contracts over 5 days. Deep out-of-the-money tail protection at 85/95/100 is piling up — the market is heavily hedging against a decline, even betting on another leg lower post-earnings.

IV. Three Scenarios and Corresponding Strategies (Illustrative, Not Recommendations)

Scenario 1: Post-earnings stock holds above 100

This suggests that after the sharp drop, support has held, with the long-term narrative (LTA/HBM4) providing bids. With earnings out of the way, IV collapses sharply from its 129% high (IV crush) — this is a scenario for sellers and dip-buyers:

• If you remain bullish on long-term value and are willing to take assignment: Sell Puts at strong support levels — refer to the heaviest Put OI around 100 (39,000 contracts) or the 95 $SKHY 20260731 95.0 PUT$ area, where you can acquire shares at a discount and still collect decent premium after IV crush.

• For risk control: Use a Bull Put Spread, e.g., sell 100 $SKHY 20260731 100.0 PUT$ / buy 90 $SKHY 20260731 90.0 PUT$, capping downside tail risk.

• If already holding shares: Sell OTM Covered Calls (e.g., 135/140) to reduce cost basis.

• ⚠️ Do not rush to sell naked Puts while IV remains elevated and the trend has yet to stabilize — wait for clear signs of support before acting.

Scenario 2: Post-earnings stock breaks below 100

This would mean the bears (those 95 Put buyers) have won the bet — a deep breakdown with negative Gamma acceleration:

• Do not catch a falling knife. Below 100, the next thick support wall is at 85 $SKHY 20260821 85.0 PUT$  (65,000 Put OI). Only consider selling Puts in staggered lots in the 80–85 zone after clear stabilization appears and IV has subsided.

• For trend followers: Use a Bear Put Spread to ride the downside while controlling costs.

• If already assigned shares: Evaluate whether to sell Covered Calls to reduce cost basis for a long-term hold, or cut losses — this depends on whether you still believe in the long-term narrative.

• ⚠️ Breaking 100 implies that the near-term fundamentals have been disproven or that panic dominates. No matter how strong the long-term thesis, you must first survive the liquidity shock.

⚠️ Disclaimer: The above is an observational analysis of public options data and a strategy illustration, provided for educational and discussion purposes only. It does not constitute investment advice. SK Hynix carries an IV of 129%, and earnings are a major event — any price level is probabilistic. Investing involves risk; options are derivative products, and risk is particularly elevated under high-IV conditions.