Is Super Micro stock's recent pullback a buying opportunity?
Super Micro is still up 177% in 2024's stock trading.
In the recent U.S. stock market, the soaring Super Micro Computer ($SMCI) has almost rivaled the momentum of Nvidia.
Since 2024 began, $SMCI's stock price surged from $280 and briefly crossed the $1000 mark, becoming one of the most closely watched stocks in the AI sector.
However, last Friday, just as the market was eagerly anticipating $SMCI's consecutive rise, the stock plummeted nearly 20%, marking its largest single-day decline since August of last year. According to Bloomberg data, traders who shorted the stock on that day netted a paper profit of $1.2 billion.
On Tuesday, $SMCI initially dropped over 11% before rebounding, but still closed down nearly 2% (Note: U.S. markets were closed on Monday). After two consecutive days of pullback, $SMCI's stock price fell back below $800. Despite this, its year-to-date gain remains at an impressive 177%.
So, for investors, could these two days of pullback present a buying opportunity? Let's take a look at how the options market is currently pricing this situation.
1.
Looking at the overall market, the trading volume of $SMCI options has decreased from the previous two trading days, but it still remains high. On Tuesday, it ranked third in the list of options based on stock assets, following only Nvidia and Meta, with Tesla in fourth place.
（Source：Tradingflow.com）
2.
Overall options data for $SMCI stock (February 20th) shows a slight advantage in bearish sentiment; broken down by indicators:
- The volume of stock trades corresponding to options (DEX) indicator shows a bullish bias
DEX：Delta Exposure, option dealer delta exposure converts option trading size to an equivalent stock volume (bought or sold).
- From the perspective of premiums, the bearish side has a more pronounced advantage
（Source：Tradingflow.com）
3.
In the $SMCI options chain, there were several notable trades on Tuesday:
TradingFlow detected potential new long positions in the $SMCI options chain (highlighted by yellow stars in the chart). Following a pullback of over 20%, funds entered the market to bet on a rebound.
（Source：Tradingflow.com）
(Note: Half yellow star indicates that this is a potential open position, because the size of the trade exceeds the amount of open interest and the reset of the daily option volume.)
At the same time, there were also orders suspected to be new opening short positions flooding in, including actions from institutions (as seen by the green flame icon in Figure below). According to Bloomberg, despite the victory for the bears last Friday, short positions are still facing losses of nearly $5 billion due to the continuous surge in $SMCI stock price.
（Source：Tradingflow.com）
（Source：Tradingflow.com）
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Before making any financial investment decisions, please ensure you thoroughly understand all aspects of the information and conduct your own research.