{"id":65074,"date":"2025-09-02T02:00:35","date_gmt":"2025-09-02T07:00:35","guid":{"rendered":"https:\/\/www.tradestation.com\/insights\/?p=65074"},"modified":"2025-09-02T07:47:38","modified_gmt":"2025-09-02T12:47:38","slug":"options-alert-smci-ai-broken","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2025\/09\/02\/options-alert-smci-ai-broken\/","title":{"rendered":"Options Alert: Is This AI Pioneer Broken?"},"content":{"rendered":"<p>Super Micro Computer was an early leader in the AI boom, but one options trader could be taking a grim view.<\/p>\n<p>This large transaction occurred Friday afternoon in the maker of AI servers:<\/p>\n<ul>\n<li>20,000 29-August 44.50 calls traded for $0.01.<\/li>\n<li>20,000 29-August 47.50 calls traded for $0.01.<\/li>\n<\/ul>\n<p>Volume was below open interest at both strikes, which suggests existing positions were closed before expiration.<\/p>\n<p>At the same second, these blocks hit:<\/p>\n<ul>\n<li>20,000 5-September 43 calls were sold for $0.53.<\/li>\n<li>20,000 5-September 45.50 calls were bought for $0.15.<\/li>\n<\/ul>\n<p>Volume exceeded open interest in both strikes, which indicates new positions were\u00a0<em>opened<\/em>.<\/p>\n<p>That combination of activity suggests the trader previously sold a\u00a0<a href=\"https:\/\/www.tradestation.com\/insights\/2024\/07\/07\/options-trading-key-points-credit-spreads\/\">credit spread<\/a> expiring last Friday. He or she apparently made money on it and rolled it forward to this week. A <a href=\"https:\/\/www.tradestation.com\/insights\/2025\/05\/23\/super-micro-options-downtrend\/\">similar transaction<\/a> occurred in May, which could reflect ongoing activity by a single large investor.<\/p>\n<h2>Selling Calls<\/h2>\n<p><a href=\"https:\/\/www.tradestation.com\/insights\/2024\/05\/12\/the-basics-of-options\/\">Calls<\/a> fix the price where a security can be purchased. They can appreciate when shares rise, so they are associated with bullish trends. However, they can be sold in credit spreads, letting traders profit from shares not climbing to a certain level.<\/p>\n<p>In the case of Friday&#8217;s activity, the investor may have previously sold the 29-August 44.50 calls and bought the 29-August 47.50s as a hedge against a rally. Such a transaction would have generated a credit at the time.<\/p>\n<p>It apparently worked because SMCI closed Friday at $41.54, down 5.5 percent. Rolling to this week&#8217;s expiration would have generated an additional credit of $0.38. The adjustment lowered the upside threshold for maximum profit by $1.50 (from $44.50 to $43), potentially reflecting a negative view of the stock.<\/p>\n<p>It\u2019s also noteworthy that the strategy is using short-dated contracts. That can capture the quicker pace of <a href=\"https:\/\/www.tradestation.com\/insights\/2024\/05\/12\/memory-tricks-options-greeks-delta-gamma-theta-vega\/\">time decay<\/a> in the final 1-2 weeks of an option\u2019s life.<\/p>\n<div id=\"attachment_65077\" style=\"width: 1930px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-65077\" class=\"wp-image-65077 size-full\" src=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a.png\" alt=\"\" width=\"1920\" height=\"918\" srcset=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a.png 1920w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a-300x143.png 300w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a-1024x490.png 1024w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a-768x367.png 768w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a-1536x734.png 1536w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SMCI_20250829a-1080x516.png 1080w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/><p id=\"caption-attachment-65077\" class=\"wp-caption-text\"><em>Super Micro Computer (SMCI), daily chart, with select patterns and indicators.<\/em><\/p><\/div>\n<p>SMCI was the second-worst performer in the S&amp;P 500 last month, according to TradeStation data. Its drop began on August 6 after earnings, revenue and guidance missed estimates. Moving average convergence\/divergence (MACD) is falling and the 8-day exponential moving average is below the 21-day EMA. Those patterns may signal short-term bearishness. Prices additionally broke the 50-day moving average, which may reflect a weakening intermediate-term trend.<\/p>\n<p>Dell Technologies (DELL), a rival in the AI server market, also fell sharply on Friday after guiding the current quarter below consensus. Combined with <a href=\"https:\/\/www.tradestation.com\/insights\/2025\/08\/20\/technical-analysis-ai-done\/\">potential topping patterns<\/a> in big companies like Microsoft (MSFT) and Palantir Technologies (PLTR), could traders think the AI trend is losing momentum?<\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n<p><em>Options trading is not suitable for all investors. Your TradeStation Securities\u2019 account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See\u00a0<a href=\"https:\/\/www.theocc.com\/Company-Information\/Documents-and-Archives\/Options-Disclosure-Document\">www.TradeStation.com\/DisclosureOptions<\/a>. Visit\u00a0<a href=\"http:\/\/www.tradestation.com\/Pricing\">www.TradeStation.com\/Pricing<\/a> for full details on the costs and fees associated with options,<\/em><\/p>\n<p><em>Margin trading involves risks, and it is important that you fully understand those risks before trading on margin. The Margin Disclosure Statement outlines many of those risks, including that you can lose more funds than you deposit in your margin account; your brokerage firm can force the sale of securities in your account; your brokerage firm can sell your securities without contacting you; and you are not entitled to an extension of time on a margin call. Review the\u00a0Margin Disclosure Statement at\u00a0<a href=\"https:\/\/uploads.tradestation.com\/uploads\/margin-disclosure-statement.pdf\">www.TradeStation.com\/DisclosureMargin<\/a><\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Super Micro Computer was an early leader in the AI boom, but one options trader could be taking a grim view.<\/p>\n","protected":false},"author":39,"featured_media":65073,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[14,30],"tags":[1308],"class_list":["post-65074","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-options","category-technology","tag-smci","et-has-post-format-content","et_post_format-et-post-format-standard"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.3 - 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Drawing on more than two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories \u2013 especially those overlooked by other commentators. 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