100,000 Doomsday Calls on Software—Could Microsoft Spring a Surprise!?
The biggest difference between this week and last: negative sentiment toward memory chips is finally spreading widely. Last week was "buy the dip with full confidence"; but after CXMT's listing Monday, plus news of mass-produced Chinese DUV, fears of surging supply crushed an already fragile uptrend. For some names, a monthly pullback has turned into a quarterly one, and panic is fully setting in.
Yet Tuesday's semiconductor crash didn't drag the broad market down—which, to me, isn't a good sign. Last week someone traded 70,000 contracts of the Aug 19 29 call$VIX 20260819 29.0 CALL$ . If the market won't correct even now, what is this VIX call betting on? Surely not a rate hike at Wednesday's FOMC?
$VanEck Semiconductor ETF(SMH)$
Lots of short-dated big orders this week. For example, Friday someone opened this week's 530 put$SMH 20260731 530.0 PUT$ , then quickly rolled it to the Aug 7 530$SMH 20260807 530.0 PUT$ after Monday's drop. Since a doomsday-option buyer's value evaporates the moment the trend reverses slightly, buyers tend to roll after locking in profit—securing some gains while keeping the bet alive.
But the doomsday order worth watching most is the IGV 88 call$IGV 20260731 88.0 CALL$ . I'd expected it to close Monday, but as of writing it's still open—and it's 100,000 contracts, roughly $20M in notional! Filled at 2.15, strike 88—meaning below 90 it turns unprofitable. For now it looks set to hold firmly through Tuesday; possibly a bet on a bullish surprise from Microsoft and Meta earnings.
Hynix reports Wednesday; the stock crashed ahead of it. Monday someone bought 20,000 of the 95 puts$SKHY 20260731 95.0 PUT$ . Given it just can't rally, I'd like to sell calls—but few are doing it, likely because the stock's already been hammered to lows with heavy shorts, so a bounce could be brutal. So the next-best play: QQQ has plenty of sell-call orders, e.g. $QQQ 20260831 700.0 CALL$ , implying QQQ struggles back to 700 in August and consolidates another month.
Bearish positioning has worsened again; another pullback to 180 can't be ruled out—though 190 as support won't break easily.
The 990 $MU 20260821 990.0 PUT$ short isn't closed; price is heading toward the 700–800 zone. Two other Aug 21 shorts also remain open $ARM 20260821 380.0 PUT$ $DRAM 20260821 60.0 PUT$, un-rolled—looks like it's not yet time to bottom-fish.
On rolling at key junctures, SPCX is a live example. Shorts closed the earlier 100 put$SPCX 20261016 100.0 PUT$ and rolled to the same-expiry 85 put$SPCX 20261016 85.0 PUT$ —done at a share price of 110, signaling the market may chop here and pick a direction, so they banked some profit and rolled down to a lower strike. Good news: SPCX may stabilize for a while. Bad news: 110 may not hold, and further downside can't be ruled out.
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