Semiconductor ETF options show caution ahead of Nvidia results

Written by Iqbal Ahmed

New York (Reuters)-Options markets are preparing for fluctuations at the level of industry when AI-CIPMANER NVIDIA reports on Wednesday’s results, with defensive options contracts on ETF semiconductors that draw heavy trading.

For Vaneck Semiocutor ETF, the largest ETF semiconductor with about $ 22 billion of assets, about 2.4 variable options have been changed daily over the past ten days against the trading of each summons option, and was more defense in trading in about 10 months, according to commercial alert data.

Call options transfer the right to buy shares at a fixed price in the future while providing contracts provided by the right to sell shares at a certain price.

“The purchase of SMH before NVIDIA profits reflects an increasing concern about the potential fluctuations of the entire sector after the report,” said Chris Murphy, head of the strategy derived from the Susquehanna Financial Group.

On Tuesday, commercial alert data showed that about 105,000 options were changed changing options for about 16,000 options for calls, by 3 pm East time (1900 GMT).

In one of the prominent trade, one investor bought 50,000 SMH options that would guard from ETF shares sliding about 10 %, to less than $ 220, by the end of May.

Analysts said that NVIDIA represents about five semi -eTf assets, but because of its dominance in the artificial intelligence market, the effect of the chips maker exceeds its weight in the box.

Murphy said that while investors focused on SMH ETF defensive plays, the procedures options on NVIDIA themselves were more mixed.

Murphy said that the investors were selling options to take advantage of the increasing fluctuation expectations about the profits of the chip maker, which means that they were betting on the reaction to the results of the chips maker would not be severe.

“The hedge was in SMH while in NVDA in NVDA, it controls tactically in high installments before profits,” he said. Susquehanna is making markets in NVIDIA leaves.

The list of interactive brokers showed one of the 25 most active securities by the customer’s orders in second place, which confirms the increasing interest of the investor in the results. However, the stock was only one of two names that were clear investors from the sellers.

“This is possible to reflect some caution before the profits after the strong round,” said Steve Sosnik, chief strategic expert for interactive brokers. NVIDIA will be the last “Seven Magnificent Seven” Megacap Tech and Growth Forea to report results for this period. Their shares were mixed in 2025 after driving the market above as a group in the past two years.