SK Hynix’s Seoul Options Book Held 28 Calls for Every Put Before 5% Slide

Most of those calls sit at a strike far below the market, which points to structural, stock-replacement positioning rather than a crowd of fresh bullish bets. In New York, options on SK Hynix’s Nasdaq-listed depositary receipts are split almost evenly between calls and puts.

By MoneyTurkey Options Desk

Key points

Going into Tuesday’s sell-off, open interest (OI), the number of contracts still outstanding, in SK Hynix’s November Korean single-stock options stood at 112,566 calls and 4,083 puts at the 2 November close. That is a put/call ratio of 0.036, or about 28 calls for every put.
About 70% of the November call OI, 78,485 contracts, is at the ₩1,050,000 strike. That is roughly 25% below Tuesday’s close, so the 3 November fall left those calls deep in the money.
Samsung Securities linked the build-up of deep in-the-money SK Hynix calls to rebalancing by a Hong Kong-listed leveraged exchange-traded fund (ETF). Options on the US-listed SKHY receipts show no comparable tilt, with a whole-chain put/call ratio of 1.05.
Data note: Korean single-stock option OI for the 3 November session could not be verified at the time of writing. All Korean options figures in this article are from the 2 November close. Share-price and futures figures are from 3 November.

SK Hynix fell 5.03% to ₩1,398,000 in Seoul on Tuesday 3 November, Yonhap reported. The shares recovered to ₩1,433,000 in the morning, then extended losses in the afternoon to an intraday low of ₩1,379,000. Samsung Electronics fell 4.15%, and the Korea Composite Stock Price Index (KOSPI) dropped 3.59% to 5,648.79, according to a separate Yonhap report.

The Korean options book on the stock was heavily skewed towards calls before the sell-off. Until the 3 November OI is published, it is not clear how much of that positioning changed during the fall.

What happened

US technology stocks fell overnight as worries about the returns on artificial-intelligence spending resurfaced. Oracle announced plans to sell $20bn of shares and bonds to fund AI infrastructure. Anthropic said it expected to spend $895.4bn on infrastructure and other purchases. The Philadelphia Semiconductor Index fell 3.37%, Yonhap reported, and investors were also cautious ahead of the US midterm elections.

“Big tech’s string of corporate bond issues stoked worries about AI funding and weakened sentiment across the AI value chain,” said Lee Kyung-min, an analyst at Daishin Securities, as quoted by Yonhap. Kang Jin-hyuk of Shinhan Investment said chip stocks gave back the previous day’s gains “on the noise of AI capital constraints”, despite lower oil prices.

Foreign investors were the largest net sellers of SK Hynix, offloading ₩637.6bn of the stock, and Morgan Stanley and JPMorgan were among the top sell-side brokers. Across the KOSPI as a whole, foreigners sold a net ₩1.53tn and individuals bought a net ₩1.66tn. Other corporations, a category that includes company buybacks, bought a net ₩334.9bn while SK Hynix’s share repurchase programme continued, Yonhap said.

The November SK Hynix single-stock future closed at ₩1,400,000, down ₩72,000, on volume of 430,519 contracts and OI of 746,786 contracts, according to Korea Exchange (KRX) data published by Yonhap Infomax.

The options book

The figures below are from the 2 November close, as compiled from KRX data by the independent KOSPI Monitor dashboard. Its report was generated at 08:30 Korea time on 3 November (23:30 GMT on 2 November).

Call/put split: November-expiry calls had 112,566 contracts of OI across 39 observed strikes, against 4,083 puts. That gives a put/call OI ratio of 0.036. The same measure was 0.60 for Samsung Electronics’ November options and 0.45 for the benchmark KOSPI 200 index options.
Change on the session: compared with 30 October, call OI rose by 15,350 contracts and put OI by 41.
Where the calls sit: the largest single call position, 78,485 contracts, is at the ₩1,050,000 strike. That was 28.7% below the 2 November close of ₩1,472,000 and is about 25% below Tuesday’s close. Among strikes nearer the money, ₩1,200,000 carries the most OI for both calls (8,460 contracts) and puts (911), and it is also the near-the-money “max pain” level, the price at which option holders would collectively lose the most at expiry. The at-the-money strike, where the strike price is closest to the share price, was ₩1,450,000.
Other expiries: further-dated SK Hynix options are much smaller. KOSPI Monitor shows 13,217 contracts of total OI in December, 13,556 in March 2027 and 5,532 in January 2027.

The November contracts expire on Thursday 12 November, the second Thursday of the month and the last trading day for KRX monthly equity options. They are cash-settled, and each contract covers 10 shares.

Why it matters

A put/call ratio as low as 0.036 might look like extreme bullishness. Where the open interest sits suggests a more mechanical explanation. A deep in-the-money call moves almost one-for-one with the share price, so it acts much like owning the stock with less capital tied up.

In a July note, Jun Gyun, a derivatives and ETF strategist at Samsung Securities, reported that since May, OI in deep in-the-money SK Hynix calls had surged. He said negotiated block trades in those calls had run at more than ₩1tn a day, mainly by foreign investors. On the 15 July close, 97% of the August call OI was concentrated in three deep in-the-money strikes. Jun said the build-up appeared closely related to CSOP Asset Management’s swap-based SK Hynix leveraged ETF in Hong Kong (07709 HK). After swap limits were cut and costs rose, the fund raised its permitted option exposure to as much as 45% of net asset value. The note described this as an estimate. MoneyTurkey has not confirmed that the November positions belong to the same holders.

Public OI data cannot show whether the holders of those calls bought or sold them. KOSPI Monitor notes that OI concentration “does not confirm actual support or resistance, a price target, or a directional signal”. The thin put side means relatively little listed downside protection is concentrated in this market. With eight trading days to expiry as of 2 November, small changes in the share price have a larger effect on the value of options near the money.

Seoul versus SKHY in New York

SK Hynix’s American depositary receipts (ADRs), which trade on Nasdaq under the ticker SKHY, have had listed options since 14 July. Ten ADRs represent one Seoul share, according to Saxo. Because a US contract covers 100 ADRs, one SKHY option and one KRX SK Hynix option each give exposure to 10 underlying shares.

The US book is far larger and evenly balanced. At the 2 November close, SKHY had 1,141,393 contracts of OI across 18 expiries: 555,812 calls and 585,581 puts, a put/call ratio of 1.05, according to Stocknear. The figures match MarketXLS. The four November SKHY expiries together held about 173,000 calls and 171,000 puts, with the monthly 20 November contract the largest at 127,105 calls and 121,666 puts. At-the-money implied volatility, the option market’s estimate of future price swings, rose to 70.7% on 2 November from 67.5% on 30 October, Ohey data show. SKHY closed at $147.71 on 2 November.

When SKHY options debuted in July, early trading was dominated by short-dated contracts, Bloomberg reported. Daniel Kirsch, head of options at Piper Sandler, expected strong retail demand for short-dated bullish calls, Newspim reported. Four months on, the US chain is split roughly evenly between calls and puts, while the Seoul book is almost entirely calls and concentrated at one deep in-the-money strike.

The Korean book has received far less attention. MoneyTurkey found little English-language coverage of SK Hynix’s KRX option positioning beyond specialist dashboards and Korean broker research.

What to watch

3 November OI: whether KRX data for Tuesday show the deep in-the-money calls being closed, rolled or added to after the 5.03% fall, and whether put OI rises from a low base.
₩1,200,000 strike: the heaviest near-the-money strike for both calls and puts, and the near-the-money max pain level, about 14% below Tuesday’s close.
12 November expiry: how the November positions roll into December. Further-dated KRX OI is a fraction of November’s, so the size of the roll will show whether the structural call demand persists.
SKHY overnight: the US session on 3 November, after the US midterm elections, will set the tone for Seoul’s open on Wednesday. The 6 November and 20 November SKHY expiries carry the most near-term US OI.
Foreign flows and the buyback: whether foreign selling of SK Hynix continues, and how much SK Hynix’s own share purchases offset it.

Sources

This article is for information purposes only and does not constitute investment advice. MoneyTurkey does not recommend buying or selling any security, option or other financial instrument. Options carry a high risk of rapid loss.

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