Chips and Convertibles Drive Unusual Options Flow

September kicks off with clear options signals across semiconductors and a high-profile convertible deal in China tech.

BILI — Bilibili — dropped a $700 million convertible note offering Thursday, with Tencent subscribing to $200 million of that tranche. Options flow in names tied to this deal is notable. BILI carries 8.3% short interest of free float with availability at just 30%. That tight borrow environment amplifies any put activity.

The biggest options bet volumes this week sit firmly in the semiconductor space. NVDA and MU top both the positive and negative bets leaderboards simultaneously — a sign of genuine two-sided positioning rather than directional conviction. Micron is up a remarkable 235% year-to-date. That extreme run is attracting both call buyers chasing momentum and put buyers hedging the top. Analysts still see 58% return potential, so the bull/bear tug-of-war in options is unlikely to settle soon.

SNDK — SanDisk — is another standout. The stock is up 554% year-to-date. Negative options bets are climbing alongside positive ones. With availability at a massive 3,575% of short interest, borrows are plentiful. Put buyers face no friction entering new positions.

On the policy front, news that South Korea secured $2 billion in commitments from US chipmakers including MU and GOOGL is lifting sentiment across the sector. PANW — up 78% year-to-date — is approaching its Q4 earnings report. Cybersecurity options flow has been unusually active as target price upgrades arrive from multiple analysts this week.

Bond market volatility is the macro backdrop. US 10-year yields at their highest since 2023 create hedging pressure on long-duration growth names — watch for elevated put volumes in high-multiple tech into the weekend expiry.

This note is for informational purposes only. Not financial advice.