SK Hynix Range-Bound Strategy: Annualized Yield Reaches 103%!
In the current range-bound market, U.S.-listed SK Hynix has a key weapon that the Hong Kong-listed 7709 $CSOP SK Hynix Daily (2x) Leveraged Product(07709)$ lacks: options! The Hong Kong ticker can only trade the underlying stock for price differences, while U.S.-listed SKHY allows you to Sell Puts during high volatility, turning range-bound movement directly into cash flow. Indeed, we've seen many large Sell Put orders over the past two days.
Why is now particularly suitable for Selling Puts? SK Hynix reports earnings on 7/29, and pre-earnings IV has been pushed very high, making premiums especially rich. In addition, while the memory sector may not rally much in the short term, its long-term value remains intact. These two factors combined create the golden scenario for Selling Puts: you collect a high premium, with the trade-off being that you're willing to take assignment at a lower price and hold for the long term — and SK Hynix happens to be exactly the kind of stock you'd be willing to take.
For strike prices, you can refer to recent large orders:
Thursday's Sell Put 135 large order — $SKHY20260731135.0PUT$ — achieved a staggering annualized yield of 103%! However, this strike price is closer to the current price, meaning a higher probability of assignment.
The Sell Put large orders from the past two days at 120 — $SKHY20260731120.0PUT$ — and 125 — $SKHY20260731125.0PUT$ — offered annualized yields of about 40%, with deeper out-of-the-money strikes and thicker safety cushions.
The higher the strike price, the more attractive the premium and annualized yield, but the greater the probability of being assigned. The lower the strike, the safer it is, but the less premium you collect. Which one to choose depends on whether you're more inclined to collect higher premiums or more concerned about taking assignment.
Friday's sharp decline in the semiconductor sector may trigger another wave of emotional panic. But considering that Changxin (CXMT) will list on the A-share market on Monday, this somewhat puzzling drop is quite intriguing.
Based on options open interest, there's no hope for Tesla to rebound to 400 in the short term. Institutions have put on a bear call spread: Sell Call 335 — $TSLA20260731335.0CALL$ — and Buy Call 350 — $TSLA20260731350.0CALL$ . The stock price likely won't be able to hold above 350 next week.
The lower support level is first seen at 300, then the 200-week moving average at 280. While the sharp drop is quite suitable for Selling Puts — $TSLA20260731280.0PUT$ — I personally feel a more comfortable price would be 250.
$Alphabet(GOOGL)$ $Alphabet(GOOG)$
GOOGL (note: not GOOG) didn't crash as hard, but its price has converged with Tesla's, similarly capped below 350. Institutions are selling the $GOOGL20260731337.5CALL$ and buying the $GOOGL20260731327.5CALL$.
The downside target is also strikingly similar: 300, and then 280. The difference is that GOOGL saw a Sell Put block trade opened at $GOOGL20260828285.0PUT$, the August 28 expiry 285 Put, indicating that some funds are willing to take assignment and position at 285.
Micron has a deep out-of-the-money bearish block trade opening every week, which is more likely a hedge rather than a pure bearish bet. Whether Micron will see a major decline should be referenced against the South Korean stock market's performance. With SK Hynix seeing so many large Sell Put orders buying the dip, the probability of a halving-style crash in Micron is correspondingly reduced.
For now, the stock price seems to be oscillating between 800 and 1200, making it quite suitable for deep out-of-the-money Sell Puts, such as $MU20260731650.0PUT$.
A very interesting phenomenon: Nvidia, among the trillion-dollar market cap companies, has been acting as a stabilizer for the broader market (Apple is a different story, with its performance resembling a 1x inverse SK Hynix ETF). It's currently holding above 200 and heading toward 220.
Institutions are selling next week's expiry 215 Call — NVDA20260731215.0CALLNVDA20260731215.0CALL — and hedging with purchases of the 222.5 Call — $NVDA20260731222.5CALL$ . I think for next week, a Sell Put at 200 could be considered — $NVDA20260731200.0PUT$.
SPCX keeps falling relentlessly, and 100 has once again become the new psychological floor. Well-known investor Duan Yongping recently shared on social media that he Sold Puts on 1,000 contracts of the December expiry 115 Put — $SPCX20261218115.0PUT$. If you calculate the cost based on assignment, subtracting the premium, it comes out to about 92. Although this translates to only 100,000 shares, this stance is quite telling.
Perhaps SPCX really can linger around the 100 level for a while longer.
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