Story
Wolfspeed Options Volume Surges Amid Stock Decline, Dominated by Large Bullish Spread
Summary
Options trading in Wolfspeed, Inc. spiked on Friday, with call volume far exceeding put volume, driven by a massive, long-dated call spread even as the company's shares fell.
Wolfspeed, Inc. (NYSE: WOLF) experienced a significant surge in options market activity on Friday morning, even as its stock price declined. By 10:11 a.m. New York time, total options volume reached 35,618 contracts, with bullish call options significantly outpacing bearish put options, according to exchange data compiled by Bloomberg.
Trading Snapshot
The heightened activity occurred while Wolfspeed's stock traded down 4.52% at $35.57. Despite the share price drop, call volume totaled 25,433 contracts, more than double the put volume of 10,185 contracts.
This divergence between the stock's negative performance and the bullish sentiment in the options market was largely driven by a few substantial block trades. The company's three-month implied volatility also saw a decrease, falling 2.98 percentage points to 128.32%.
Notable Trades
Two large spread trades accounted for the majority of the day's volume:
Ad- A bullish call spread with a January 15, 2027, expiration made up 24,680 contracts. The trade involved 12,340 contracts of the $45 strike call and 12,340 contracts of the $60 strike call.
- A bearish put spread with a July 17, 2026, expiration accounted for 10,000 contracts. This trade consisted of 5,000 contracts of the $40 strike put and 5,000 contracts of the $50 strike put.
What It Means for Investors
The high volume of call contracts, particularly the large, long-dated call spread, suggests that some institutional traders may be positioning for a significant rebound in Wolfspeed's stock over the long term. A call spread is a strategy that can profit from a moderate rise in the underlying stock price while capping both potential gains and the initial cost of the trade.
Further data showed that Wolfspeed’s three-month 90/110 skew, a measure of the relative demand for puts versus calls, declined by 7.92 percentage points. This indicates a reduced demand for protective put options compared to upside calls, reinforcing the bullish tilt seen in the day's trading volume.