SK Hynix options debut meets retail demand for AI supply-chain trades

Options on SK Hynix’s U.S.-listed shares are scheduled to begin trading Tuesday, opening a new derivatives market tied to one of the semiconductor companies most closely watched by AI-focused investors. The South Korean memory-chip maker raised $26.5 billion in its American depositary receipt offering on Friday, while retail investors traded an average $6.7 billion of options premium a day last month, according to a July 7 report from Citadel Securities.

The debut gives traders another way to take views on the AI hardware supply chain after demand for memory, power and other infrastructure suppliers became a central theme in U.S. retail trading. CNBC reported that semiconductor-linked options accounted for more than $1 billion of daily premium in June, making the sector the most active theme in Citadel Securities’ retail options data.

Listed options give buyers the right, but not the obligation, to buy or sell an underlying security at a specified price before expiration. For a newly listed ADR such as SK Hynix’s U.S. shares, that market can draw investors seeking leveraged exposure, hedging tools or short-dated trading instruments around company and sector news.

Gav Blaxberg, founder and chief executive of Wolf Financial, told CNBC that investors are focusing on SK Hynix because Nvidia has indicated a continuing need for memory supply. Blaxberg said demand is elevated and that only a small number of companies can provide supply at the required scale.

SK Hynix’s memory business has drawn comparisons among retail traders to Micron, another company tied to the AI supply chain. CNBC reported that Micron had gained almost 1,000% over the past year before falling 23% from its late-June high.

David Dziekanski, founder of ETF firm Quantify Funds, described the retail cohort tracking constraints in the AI buildout as “bottleneck bros” in comments to CNBC. He said many of these traders are trying to identify the next company that may benefit from supply limitations in areas such as memory and power.

The interest has also been influenced by public filings and copy-trading tools. CNBC reported that traders have been monitoring 13-F and 13-G filings linked to Leopold Aschenbrenner, the former OpenAI researcher whose stock-picking record has drawn attention in retail trading circles. Applications such as Autopilot and Dub allow users to follow portfolios or strategies associated with prominent investors, according to CNBC.

Options may not be the only leveraged product competing for flows tied to SK Hynix. Reuters reported last week that at least 10 exchange-traded fund issuers had filed registration documents for single-stock ETFs tracking the company’s U.S. shares. Single-stock leveraged ETFs seek to deliver a multiple or inverse multiple of a stock’s daily move, but their returns can diverge over longer periods because they reset daily.

A Cboe spokesperson told CNBC that the options were set to begin trading Tuesday and were still awaiting certification by the Options Clearing Corp. at the time of the report. The OCC serves as the central clearinghouse for listed U.S. options, standing between buyers and sellers to manage settlement and counterparty obligations.

This story draws on original reporting from CNBC.