Super Micro Sees Heavy Put Options Trading Amid Stock Decline After Hindenburg Report
$Super Micro Computer (SMCI.US)$ is seeing heavy put options trading as a short-seller report from Hindenburg Research sent the stock of the server maker tumbling as much as 8% before the shares pared their declines.
Volume on put options that give the holders the right to sell the stock at $500 reached 13,480 contracts by early afternoon in New York Tuesday. That's the biggest among SMCI puts and calls of various strike prices across 16 expiration dates that stretch through Dec. 18, 2026, data tracked by moomoo showed. (To see the stock options ranking, click here.)
Almost three quarters of the $500 put options are expiring in three days. At 9,980 contracts, the volume for that specific option was more than triple the open interest.
Almost three quarters of the $500 put options are expiring in three days. At 9,980 contracts, the volume for that specific option was more than triple the open interest.
The climb in volume was initially driven by the rush for protection against potential continued price share slump for the company at the center of the Hindenburg report that allegedly "found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues."
"Many of Hindenburg's concerns over Super Micro, such as a temporary Nasdaq delisting in 2019, related-party transactions and customer concentration, aren't new," Woo Jin Ho, a senior technology analyst at Bloomberg Intelligence, said in a note Tuesday. Still, he said the report "might intensify the spotlight on client relationships, especially given heightened U.S. scrutiny of AI-systems sales to sanctioned companies and countries.
The price of those $500 put options climbed as much as 123% just minutes after the stock opened lower at $519.42, fueling hopes that the options could be in-the-money before they expire. As SMCI's stock pared its decline to 2.3% to $550.35, the put options moved deeper into out-of-the-money category.
After that initial rush to buy the put options, selling ensued amid rising probability that the contract could expire worthless in three days. By 1 p.m. in New York, those options were down 44.9%.
Amid Tuesday's wild swing in the stock price, seven of the 15 technical indicators tracked by moomoo are leaning positive, signaling the stock may be oversold and the trend could turn bullish.
Share your thoughts on SMCI.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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Northsea9 : This content was digested yesterday, with a drop of 50 points, and the impact has basically ended. In the future, let's see if there is any news about the government launching an investigation. If not, it will be considered a normal fine. If there is, there will continue to be a slight decline, with a maximum of around 470.
webguybob : Buy the big dip???
102514703 : Done, my heart can't take it.
Northsea9 : The price of long-term options has not fluctuated much, indicating that the price will pull back, with little impact.