Election Puts Flood the Options Market

A Democratic sweep of the midterms has turbocharged options activity in AI and semiconductor stocks, with put volume spiking sharply as investors scramble to hedge or bet against the sector's near-term outlook.

The trigger is clear. Democrats took control of Congress, and markets immediately priced in a harder line on data centre buildout. The FT reported that investors fear the new majority will slow AI infrastructure spending. Around $3 trillion was wiped from US equities in the initial reaction.

NVDA sits at the centre of the options storm. The stock's RSI has dropped to 34.5, nudging oversold territory. ORTEX screening data shows negative bets on semiconductors running at their heaviest level this week, with NVDA, AMD and INTC all ranking among the top names for bearish options flow over the past seven days. Near-term expiries on 6 and 9 November are the busiest. That points to traders positioned for continued downside through this weekend rather than a quick bounce.

META is also drawing heavy put interest. Its RSI stands at 40.1 and the stock is down 4.6% year-to-date. The hyperscalers, as the FT noted, face a split verdict: data centre operators may actually benefit if AI policy tightens supply. Options flow on META is more mixed than on pure-play chip names, with both bullish and bearish bets active.

MRNA is an outlier. Its options activity is concentrated in near-dated November expiries, and the MSCI World rebalance radar adds a wrinkle: Moderna carries an 88% deletion probability from MSCI World, with the announcement due on 11 November. That forced selling could total $6.4 billion in buying flows if confirmed. Options players appear to be positioning around that event date, with the Q3 earnings call also imminent.

The QQQ expiry ladder is unusually dense this week. Daily expiries run from today through 12 November, suggesting traders expect continued volatility rather than a clean directional move. The options market is not calling a bottom yet.