At 10 PM German time, markets closed with mixed signals. The DAX ended trading at 24,400.65 points, up 0.38%. The S&P 500, however, gave up 0.53% and closed at 7,375.75 — just below the psychologically important 7,400 mark.
Semiconductor Sector Under Pressure
The biggest loser of the day: Applied Materials. The chip equipment maker's stock plunged 5.28% to close at $413.57. Just last week, the company reported record results — eight Wall Street firms raised their price targets to as high as $550. But today? Profit-taking and sector rotation sent the stock tumbling.
Put holders cashed in. Weekly puts with strike 420 exploded over 180%. Put volume exceeded call volume by a factor of 2.3 — institutional hedging was clearly visible.
Sandisk, yesterday's star with a +3,613% rally since the beginning of the year, also gave back gains: down 5.30% to $1,333. The NAND supercycle continues, but short-term profit-taking dominates.
Oil Rally in the Shadow of Middle East Conflict
While tech bled, oil pumped. WTI Crude climbed to $108 per barrel — the highest level in three months. The reason: escalation in the Middle East. President Trump said Monday afternoon he called off an airstrike on Iran planned for Tuesday after Saudi Arabia and other Gulf allies asked for more time for diplomatic solutions.
Uncertainty drives calls. Energy sector ETFs like XLE rose 1.90%, Exxon Mobil 1.91%, Chevron 2.03%. Oil calls with strike 110 for June expiry recorded volume of over 42,000 contracts — five times the open interest.
What Options Traders Are Watching Now
Markets are in a critical phase. The VIX sits at 12.8 — historically low. That means: either the sideways movement continues (good for theta sellers), or an unexpected catalyst triggers an IV spike.
Tomorrow, Fed Governor Waller's speech is scheduled for 2 PM. Put volume has already increased by 22% — smart money is hedging. Anyone holding iron condors or credit spreads should monitor strikes closely.
Applied Materials remains on the watchlist. The 400 support is critical. If it breaks, market makers will be forced into further selling — a classic downside gamma squeeze.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not an indicator of future results.