Options traders buy protection on semiconductor ETF amid volatile chip stock rally

Options traders increased buying of put options on the iShares Semiconductor ETF (SOXX) as semiconductor stocks experience a volatile rally with sharp drawdowns this year. The sector has seen gains over 300% from 2025 lows but faces risks of sudden steep declines similar to past tech rallies. Using put spreads offers a cost-effective way to hedge against potential sharp drops without betting on a crash. This cautious strategy reflects concerns about ongoing volatility in chip stocks ahead of key earnings like Micron's.