SK Hynix options started trading. Traders ignored them. They bought single-stock ETFs instead.
The summary admits this outright. Call-buying dried up because leveraged funds and single-stock ETFs "stole the speculative limelight." That's the actual phrase. Stole the limelight. As if SK Hynix options were standing onstage rehearsing their big number when some jacked-up 3x leveraged fund kicked down the door and started doing backflips.
Retail traders looked at SK Hynix options and thought, you know what this trade needs? More layers. More fees. A fund wrapper. Maybe some daily rebalancing that guarantees I lose money in both directions if the stock goes sideways. That sounds perfect.
Options were supposed to be the degenerate instrument. You could lose everything by Friday. That was the appeal. But apparently that's not enough anymore. Now you need an ETF that holds options on leveraged exposure to a semiconductor stock, managed by someone named Kyle who got his Series 7 last month.
SK Hynix makes memory chips. The options on those chips are now less interesting than a fund that promises to deliver 200% of the daily return of SK Hynix, minus expenses, minus slippage, minus your self-respect.
The options launched. The market yawned. Somewhere a product manager at the exchange is staring at volume numbers wondering why he bothered filling out the paperwork. He could have just told retail traders to light their money on fire directly, but he wanted to give them options first.
They chose the ETFs anyway, because when you're wrong you might as well be wrong in the most complicated way possible.
Photo by Brecht Corbeel on Unsplash
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