Semiconductor stocks plunged 4.65%, why did NVIDIA buck the trend and rise? Institutional gaming behind 1.5 million call options.

On July 8, 2026 (Beijing time), the global capital markets experienced a highly dramatic trading day. The semiconductor sector suffered a collective slump, with the Philadelphia Semiconductor Index plunging 4.65% in a single day, Intel dropping 9.66%, and AMD falling over 6%. However, amidst the sell-off storm that swept through nearly the entire chip industry, AI chip leader NVIDIA bucked the trend and closed up 0.71%, becoming an extremely rare "green" stock in the sector.

More noteworthy than the stock price itself were the undercurrents in the options market. Call option volume exceeded 1.5 million contracts that day, while put options were less than 690k, with call option buys more than double that of puts. On one hand, a panic sell-off in the semiconductor sector; on the other, massive bets on NVIDIA call options—what institutional game logic does this extreme divergence point to?

Why Did Samsung's "Explosive" Earnings Trigger a Chip Stock Sell-off?

The trigger for this semiconductor sector crash pointed to Samsung Electronics' preliminary Q2 results.

On July 7 (Beijing time), Samsung Electronics released eye-catching preliminary earnings: Q2 operating profit reached 89.4 trillion Korean won (approximately $58.44 billion), surging about 19 times year-over-year, setting an all-time record; revenue increased 129% year-over-year to 171 trillion Korean won. This data itself was "explosive," but the market responded with selling—Samsung's stock fell instead of rising, dropping nearly 7% that day.

Why did stellar earnings trigger a sell-off instead? The core logic is that the market had already fully priced in strong earnings, and investors executed a "buy the rumor, sell the news" strategy. Some brokerages had given the highest profit expectations of up to 90 trillion Korean won, and while the actual figure of 89.4 trillion exceeded general market expectations, it fell short of the most optimistic forecasts. Additionally, investor concerns about tech giants scaling back AI infrastructure spending and the sustainability of high memory demand were brewing. After months of significant gains in chip stocks, profit-taking demand was concentrated.

Another suppressing factor came from geopolitics. Iran attacked Qatari LNG tankers near the Strait of Hormuz, causing international oil prices to surge—Brent crude broke above $74/barrel. The spike in oil prices heightened market concerns about inflation and the monetary policy path, accelerating capital outflows from high-valuation tech growth sectors.

The Philadelphia Semiconductor Index fell 4.65% that day, closing at 12,300.52 points, down nearly 16% from its late-June high. The memory concept sector dropped 5.45%, Intel fell 9.66%, Western Digital fell 7.86%, SanDisk fell 7.26%, Arm fell 6.77%, AMD fell 6.51%, and Micron Technology fell 4.71%. The VanEck Semiconductor ETF (SMH), tracking a basket of chip stocks, fell even more than 5%.

NVIDIA's "Lone Bravery": Defying the Trend and Surge in Call Option Volume

Against the backdrop of the entire semiconductor sector falling like sand, NVIDIA's performance stood out notably.

Market data showed that NVIDIA's stock price defied the trend, closing up 0.71%. Although it faced pressure intraday due to news impact—Reuters reported that Chinese AI company DeepSeek was developing its own AI chips, potentially reducing reliance on giants like NVIDIA—NVIDIA ultimately held the $200 level.

More worthy of deep analysis were the signals from the options market. According to ThinkorSwim data, on July 8 (Beijing time), total NVIDIA options volume exceeded 2.2 million contracts, with call option volume exceeding 1.5 million and put options less than 690k. Looking at active buying, call option buys were more than double that of puts.

This surge in call options was not an isolated event. Data showed that on the previous trading day (July 7, Beijing time), total NVIDIA options premium reached approximately $600 million, with about two-thirds related to call options, and call option buying volume nearly three times that of puts.

Among many trades, a series of operations suspected to be executed by a single trader was particularly eye-catching—the counterparty spent a cumulative approximately $3.5 million buying NVIDIA call options expiring at the end of July with a strike price of $200. Priced at about $7 per contract at the time of trade, NVIDIA's stock price would need to rise about 5.5% from the entry price before expiration to break even.

By the end of the day, the top five most traded NVIDIA options by volume were all short-term call options. The most active was the call option with a strike price of $200 expiring that day, with nearly 170k contracts traded, and a total nominal premium of about $11 million. This concentration of options layout in an extremely short time window and deep bet on the $200 level suggests that some traders expect NVIDIA's recent stabilization to evolve into an upward rally.

Bearish Tilt in Sector ETFs: An Extreme Divergence

In stark contrast to the surge in NVIDIA call options was the completely inverted options structure of semiconductor sector ETFs.

Data showed that the VanEck Semiconductor ETF (SMH) had a completely opposite options volume ratio—put options overwhelmingly outnumbered call options by nearly four to one. Traders bought about 33k SMH put options that day, while call option buying was only about 7,300 contracts.

This divergence reveals a highly interesting structural contradiction in current market pricing: traders are generally bearish on the semiconductor sector but are concentratedly betting on a rebound in individual NVIDIA stock.

What is the logical basis for this divergence? From a fundamental perspective, NVIDIA occupies a nearly irreplaceable position in the AI computing power supply chain. Even industry research firm SemiAnalysis, which released a report earlier in the week saying NVIDIA's next-generation Kyber NVL144 rack architecture faces delays, publicly stated on July 8 that NVIDIA is acting as the "central bank" of the entire AI ecosystem and explicitly responded that it is not bearish on NVIDIA.

From a valuation perspective, NVIDIA's stock price has retraced about 17% from its all-time high in May, with its year-to-date gain narrowing to about 4%. The $200 level has shown strong support over the past few trading days, with the stock price consistently supported by the 200-day moving average. For some institutional funds, this level may constitute an entry point with a favorable risk-reward ratio.

Meanwhile, forces shorting semiconductors are also gathering. Well-known "big short" Michael Burry continues to increase his bearish bets on AI and semiconductor sectors—he is shorting the iShares Semiconductor ETF (SOXX) through put options with strike prices above $400, expiring in March 2027. Burry previously warned that the AI rally has pushed semiconductor valuations to extreme levels.

Cryptocurrency Market Correlation: Spread of Risk Aversion

This wave of risk aversion triggered by semiconductor selling and geopolitical escalation also transmitted to the cryptocurrency market.

On July 8 (Beijing time), Bitcoin briefly broke above the $64,000 mark before slightly retreating, currently trading at $63,634. Ethereum also pulled back after standing above $1,800. According to CoinGlass data, total liquidations across the entire network in the past 24 hours reached $418.02 million, with over 106k people forced to liquidate positions.

The volatility in the cryptocurrency market is highly correlated with the transmission of macro risk sentiment. The escalation of geopolitical conflict in Iran drove oil prices higher, exacerbating selling pressure on global risk assets. Bitcoin's retreat after breaking $64,000, as some sell orders offset buying momentum, reflects that the market still lacks confidence for sustained upward momentum in the current macro environment.

From the perspective of asset correlation, the heavy decline in the semiconductor sector and the pullback in the cryptocurrency market together form a complete picture of pressure on global risk assets on July 8. NVIDIA's relative strength in this sell-off and the abnormal signals in the call options market add variables worth tracking to this picture.

Conclusion

The trading day on July 8 presented a highly tension-filled market structure: the semiconductor sector as a whole faced systemic selling, but the most core stock in the sector, NVIDIA, received large-scale bullish bets in the options market. The Philadelphia Semiconductor Index fell 4.65% in a single day, retreating nearly 16% from its late-June high; while NVIDIA call option volume exceeded 1.5 million contracts, more than double that of puts—this divergence between the sector and its leader essentially reflects the market seeking a certainty premium amid industry cycle disagreements.

The sell-off triggered by Samsung's "explosive" earnings reflects market concerns that AI semiconductor expectations are "fully priced"; while the surge in NVIDIA call options reflects another group of capital's belief in the "irreplaceability" of the AI computing power leader. The struggle between these two forces constitutes the core game logic of the current semiconductor sector.

For cryptocurrency market investors, volatility in traditional risk assets is also worth noting—the transmission effects of macro sentiment, geopolitics, and liquidity expectations across different asset classes are increasingly significant. Whether the abnormal movement in NVIDIA call options heralds the beginning of a rebound in AI chip stocks or is just a short-term emotional release by capital remains to be verified by subsequent market data.

FAQ

Q: Why did Samsung's strong earnings trigger a big drop in the semiconductor sector?

The market had fully anticipated Samsung's strong performance, and the earnings release triggered profit-taking on a "buy the rumor, sell the news" basis. Additionally, some brokerages had given a highest expectation of 90 trillion Korean won, and the actual 89.4 trillion fell short of the most optimistic forecast. Combined with doubts about the sustainability of AI infrastructure spending and valuation pressure after significant prior gains in chip stocks, multiple factors converged to trigger the sell-off.

Q: What does the surge of 1.5 million NVIDIA call options mean?

Call option volume exceeded 1.5 million contracts, with put options less than 690k, and active buying of call options more than double that of puts. This indicates that a significant amount of capital is betting against the trend on a NVIDIA rebound amid the semiconductor sector collapse, including suspected institutional-level concentrated trades.

Q: Why are the options structures of NVIDIA and the semiconductor sector ETF completely opposite?

The VanEck Semiconductor ETF (SMH) has put options outnumbering call options by nearly four to one, while NVIDIA call options are more than double puts. This divergence reflects that the market is generally bearish on the semiconductor sector but believes NVIDIA, as the AI computing leader, has unique defensive qualities and rebound elasticity.

Q: Where is NVIDIA's stock price currently?

NVIDIA's stock price is hovering around $200, about 17% below its all-time high in May, with its year-to-date gain narrowing to about 4%. The $200 level is supported by the 200-day moving average, showing strong technical support.

Q: How did the cryptocurrency market perform on July 8?

Bitcoin briefly broke above $64,000 before retreating to $63,634, while Ethereum pulled back after standing above $1,800. Affected by geopolitical tensions and risk asset selling, total liquidations across the entire network in the past 24 hours were $418.02 million, with over 106k people forced to liquidate.