Market Overview
Wall Street's main indexes ended lower on Tuesday (July 7), weighed down by losses in Micron Technology and other chipmakers due to mounting doubts about the sustainability of the AI-driven rally.
Regarding the options market, a total volume of 63,249,448 contracts was traded, of which 56% were call options.
Top 10 Option Volumes
Top 10: NVDA, TSLA, AAPL, MU, VIX, INTC, SPCX, AMZN, META, MSFT
SanDisk shares fell more than 7% on Tuesday to close at $1,617.70. Amid the sharp decline, the options market saw a sizeable put purchase valued at approximately $23.82 million. Based on the increase in open interest, the trade was likely a purchase of 1,854 contracts of the July 17, 2026 $1,750 put.
With the strike price above the underlying share price of $1,744.43 at the time of the transaction, the option was already in the money, suggesting the trade was not a low-cost wager using far out-of-the-money contracts. Instead, the positioning carries stronger downside exposure and hedging characteristics.
Large purchases of deep in-the-money puts are often associated with investors seeking to protect existing long positions or other related exposures against further declines. The trade may also reflect a more outright bearish view that the stock has additional downside potential.
Unusual Options Activity
PDD Holdings showed $1.37 million call purchase, with the transaction concentrated in the September 18, 2026 $90 call. The accompanying increase in open interest suggests the position was likely initiated by a buyer establishing a sizeable long call position.
Source: Tiger Trade App
The contract remains out of the money, indicating a directional bullish bet on the stock's longer-term performance. The buyer appears to be positioning for PDD shares to break above the $90 level, allowing the option's leverage to amplify potential gains.
As a single-leg long call strategy, the trade offers limited downside risk while requiring a meaningful move in the underlying stock to become profitable, reflecting a more offensive positioning rather than a defensive hedge.
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