To The Moon

In a single trading session, some call options lost more than 90% of their value, while certain put contracts rose severalfold.

On October 9, one Nvidia call contract fell 95.33%, while an IREN put contract gained 500%. Meanwhile, Palantir and Apple bucked the trend, with gains in selected call options.

In a market like this, it is easy to focus on which contract delivered the biggest return. But for options beginners, the more useful questions are: Why do contracts perform so differently? And is getting the direction right enough to make a profit?

AI Tech Stocks Under Pressure as Short-Dated Calls Tumble

Reports that OpenAI’s annualized revenue fell short of earlier expectations prompted investors to reassess AI valuations. Developments in the Middle East and shifting interest-rate expectations added to uncertainty around tech stocks.

Several same-day-expiry calls linked to AI and semiconductor stocks posted sharp declines:

These figures refer to specific contracts, not the underlying stocks or all options on those stocks.

For investors buying options close to expiration, a decline in the underlying stock can coincide with time decay. Even if the stock subsequently rebounds, the option may not recover to its purchase price.

That is because option prices depend not only on stock movements, but also on factors such as time remaining and implied volatility.

Being bullish on a company does not guarantee a profit from buying its short-dated calls. Traders must also consider whether the expected move will happen soon enough—and be large enough—to support the trade.

Some Put Buyers Profit, but the Gainers List Is Not a Trading Guide

Despite pressure on tech stocks, performance varied considerably.

Palantir (PLTR) rose 2.4%, while its $205 call contract gained 78.95%. Large put trades were also recorded, though more information is needed to determine their purpose.

Apple (AAPL) closed 1.11% higher, with selected calls gaining 82%. Apple showed relative resilience that day, but a single session’s gain does not establish it as a reliable safe haven.

Among the decliners, SpaceX (SPCX) fell 4.19%, while its $160 put gained 364.52%. IREN declined 7.70%, with a related put contract rising 500%.

These figures illustrate how dramatically option prices can move. They can also encourage the idea that “one winning trade is all it takes.”

Yet a contract’s daily percentage gain is not the same as an investor’s actual return. Entry timing, execution price, strike price and expiration date can all produce very different outcomes.

When a put rises 500%, look beyond direction to its starting price, bid–ask spread and trading activity. Past gains are useful for reviewing a trade, but are not, by themselves, a reason to enter the next one.

Does Active Put Trading Mean Investors Are Hedging?

Beyond individual stocks, index options also drew attention that day.

SPX put volume reached 3.1325 million contracts, versus 2.6606 million calls, giving a put-to-call volume ratio (PCR) of approximately 1.18.

One SPXW put with a November 6 expiration and a 6,975 strike traded approximately 8,000 contracts. Its volume-to-open-interest ratio (VOL/OI) was 43.02, and its price rose 38.52%.

These figures show active trading in the relevant puts. On their own, however, they do not establish that institutions were buying protection in large quantities.

Every trade has a buyer and a seller, and activity may include closing positions or executing multi-leg strategies. Therefore:

• Higher put volume does not mean every trade is a bearish bet.

• Rising volume does not, by itself, establish net buying.

• A high VOL/OI ratio does not reveal the direction of newly opened positions.

For beginners, the more useful takeaway is that options can be used not only to express a market view, but also to manage portfolio risk.

Holding one stock creates different risks from holding a diversified basket. The appropriate hedge may therefore differ. Choosing between single-stock and index options requires consideration of existing holdings, contract size, expiration and cost.

What Should Beginners Take Away from This Market?

Check the Expiration Before the Price

Options close to expiration may have low premiums, but they also leave less time for the anticipated move to occur. Zero-days-to-expiration (0DTE) contracts can change in value rapidly, and buyers may lose their entire premium within a short period.

A low purchase price does not mean low risk—and should not justify an oversized position or repeated additions to a losing trade.

Understand the Trade Before Following the Volume

A sudden surge in a contract’s volume can be a starting point for research. It is not a ready-made buy or sell signal.

Before trading, clarify whether the objective is to express a directional view, trade changes in implied volatility or protect an existing position. Different objectives call for different contracts and exit conditions.

Calculate the Potential Loss Before Focusing on the Gain

Before placing an order, answer four questions: Why am I entering this trade? When does the contract expire? How much can I afford to lose? Under what conditions will I exit?

Protective puts come at a cost. Spread strategies have specific applications and may cap returns. Beginners who do not yet understand the risks should be particularly cautious with complex strategies such as selling uncovered options.

Options can magnify trading outcomes—and the cost of misunderstanding how they work. Building a clear trading process deserves more attention than chasing the next soaring contract.

Start with the Basics to Make Sense of the Market

If you understand stock price movements but are unsure why one option fell 95% while another rose 500%, start with contract specifications, pricing factors and risk management. These foundations can help you develop your own framework for evaluating trades.

We have prepared an exclusive welcome package for new options clients, valued at up to SGD 200. It includes an Options Guidebook, online and in-person options training camps, knowledge cards, and other practical learning benefits to support Tiger investors as they begin their options learning and investing journey.

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