Equation News founder: Sold about $7 million in storage-sector put options today, believing storage-sector sentiment is nearing its limit

Deepwater TechFlow message. On July 28, Vida, founder of Formula News, said that today it sold about $7 million in put options, most of which were contracts expiring about one month later. It believes that the current decline in the storage sector has already reached extreme levels on the sentiment side; the implied volatility of related stocks is at the historical high percentile. Since the AI revolution and demand trends have not fundamentally changed, the current pullback in prices can be viewed as a discount of 35% to 50% compared with a month ago.

It also said that the reason it chose to sell put options with a deeper strike price—despite higher execution difficulty—rather than contracts closer to the current price is mainly due to its lower risk appetite and a preference for earning relatively stable premium income. Taking Micron Technology put options as an example, it said selling 15 one-month-expiry put options with a strike price of $660 would immediately generate about $47k in premium; if the stock falls below the strike and the option is exercised at expiration, it would complete the buy at what it considers a more attractive price.