Rally in chip stocks becomes the most hated in history. Here's the data

The Micron Memory Japan K.K. booth at the Semicon Japan exhibition in Tokyo, Dec. 18, 2025. Kiyoshi Ota | Bloomberg | Getty Images The rally in semiconductor stocks is so incredible, traders can't help but bet against it. Open interest in put contracts on the VanEck Semiconductor ETF (SMH) have surged the past two months to just under 1.7 million, the most ever, according to Bloomberg data going back to the fund's launch in 2011. By comparison, there are just over 500,000 outstanding call contracts. At the same time, implied volatility in the SMH is rising, nearing 55% Tuesday, near the highest in more than a year. That's a sign that the puts are mostly being bought, according to Zed Francis, chief investment officer at Chicago-based Convexitas. Zoom In Icon Arrows pointing outwards "People are hedging the move rather than leaning to it," said Francis, who runs a semiconductor options trading strategy on behalf of clients. "We've had this jump-move in the space but it's resulting in hedging activity rather than a chase. So this might be more sustainable than a boom and bust." Outright bearish speculation may not tell the entire story for the buildup in puts in the sector ETF: the appeal of SMH puts might also be tied to how manic — and expensive — options trading has gotten in single stocks. Similar to how implied volatility in the chip sector is high compared to the broader S&P 500's 16% vol, implied volatility in single stocks is even higher. …