Market Overview
The tech-heavy Nasdaq fell on Friday (July 24) as investors sold chip stocks on worries about massive spending on artificial intelligence ahead of the next batch of megacap earnings reports, while falling oil prices provided Wall Street with some support even as Middle East hostilities continued.
Regarding the options market, a total volume of 66,125,159 contracts was traded, of which 54% were call options.
Top 10 Option Volumes
Top 10: NVDA, TSLA, AAPL, INTC, MU, SPCX, AMZN, AMD, $META(META), ORCL
Source: Tiger Trade app
Micron Technology fell 6.99% on Friday. The decline was triggered by Morgan Stanley issuing a cautionary note on the storage sector cycle. Morgan Stanley Asia and Europe technology research head Shawn Kim warned that the AI-driven storage industry rally is approaching an inflection point. Memory contract prices are expected to peak in Q4, while the earnings upgrade ratio for storage manufacturers has already slipped from a 92% peak to 77%. SK Hynix and Samsung valuations have both pulled back. At the industry level, conventional DRAM price increases have shown clear signs of deceleration, with Q3 contract price growth narrowing to 13%-18% quarter-over-quarter, down sharply from Q2's 58%-63% range.
Following the sharp decline, the options market was flooded with bearish conviction. Large-trade flow was decisively negative, with a net bearish premium of $10.08 million driven by massive out-of-the-money put purchases. The two largest trades alone accounted for over $8.00 million in premium, signaling that institutional investors are aggressively positioning for further downside or hedging against a material price correction.
A PUT buy worth $6.26 million was the largest displayed trade, consisting of 2,058 contracts of the 800.0 strike put expiring on 2026-08-07. This was a single-leg bearish position, and with MU referenced at 920.95, the strike sat out-of-the-money at the time of the trade. The buyer was therefore paying premium for downside exposure well below the current stock price, which points to a directional bearish bet rather than simple near-the-money protection. The size, long-dated tenor, and deep downside strike suggest a trader positioning for a meaningful decline or seeking tail-risk hedging over the next year. MU 20260807 800.0 PUT
Source: Tiger Trade app
Unusual Options Activity
Intel declined 7.89% on Friday. The stock weakened throughout the session despite the company reporting Q2 results that comprehensively beat expectations. Intel posted Q2 revenue of $16.1 billion, up 25% year-over-year — the strongest quarterly growth in fifteen years — surpassing analyst estimates by nearly 12%. However, the company raised full-year capital expenditure from $15 billion to $20 billion and signaled spending could climb to approximately $30 billion in 2027. Morgan Stanley noted investor enthusiasm will hinge entirely on long-term confidence in these investments.
Despite the sharp sell-off, institutional options flow painted a decisively bullish picture. A colossal $16.43 million put sale and a $12.34 million bull call spread dominated the tape, with total bullish premium reaching $43.86 million against $18.61 million in bearish flow, leaving a massive $25.25 million net upside bias that signals strong conviction in a rebound.
A PUT sale worth $16.43 million was the single largest large trade, with 8,300 contracts sold at the 85.0 strike expiring on 2027-06-17. With INTC referenced at $92.32, this put sits out of the money, making the position a moderately bullish income-style trade that benefits if shares stay above $85 through expiration. Strategically, this is consistent with premium collection and a willingness to accumulate stock at an effective lower entry point if assigned, signaling confidence that downside risk is manageable over the long dated horizon.
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Risks
Implied volatility typically contracts rapidly after earnings, a phenomenon commonly referred to as IV crush, which can significantly reduce the value of long option positions even if the stock moves in the anticipated direction. In addition, time decay accelerates as options approach expiration. Investors should carefully assess the risk profile of any options strategy before establishing positions.
Disclaimer: This analysis is based on publicly available market data and is provided for informational purposes only. It does not constitute investment advice. Options trading involves substantial risk, and investors may lose more than their initial investment.
