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$11 Million in Seagate Puts and Big Bets Against SK Hynix. Read the Tape.

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Breakdown

0:04SK Hynix· ticker

SK Hynix — ADR premium compression, 50% rich to Seoul shares

  • IPO'd July 12th, closed 30% above offer price
  • ADR trades 50% premium over Seoul shares
  • Put buyers target premium compression before July 29th ADR conversion
  • December 18th 120 puts at 111% IV, break even near 104
  • Put buyers don't need business deterioration, just price convergence
1:52SK Hynix· ticker

SK Hynix — put buying reflects listing distortion

  • September 18th 150 put pulled 3.9M premium
  • Break even 132.44 (32% below spot)
  • December 18th 100 puts at 112% IV, break even near 90
  • Buyers assume ADR premium will compress
  • No need for business deterioration, just price convergence
3:44SpaceX· ticker

SpaceX — IPO performance as historical reference

  • IPO'd at 135, peaked 225, now 136
  • Median 30 IPOs up 3% week 1, down 9% year 1
  • First-year max drawdown median 54%
  • No historical guide for SK Hynix
  • Put buyers react to listing distortion reflexively
5:32Seagate· ticker

Seagate — earnings-driven de-risking trade

  • July 24th 850 calls pulled 11.2M premium
  • Break even 803.32 (8.5% below spot)
  • Expiration 4 days before July 28th earnings
  • Stock down 22% from June high, 20% below peak
  • Need 8.5% drop to break even by July 24th
7:18Cerebrus· ticker

Cerebrus — IPO performance as historical reference

  • IPO'd at 185, closed above 311
  • Now 4% above offer, 40% below first day close
  • Great companies can become poor entries with inflated IPO prices
  • Market reacts to listing distortion reflexively
  • No historical guide for SK Hynix

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