Stock Track | SOXL Surges 5.05% in Pre-market Following Semiconductor Sector Rally and Bullish Options Activity

Stock Track
24 Apr

Direxion Daily Semiconductors Bull 3x Shares (SOXL) is continuing its upward momentum, soaring 5.05% in pre-market trading on Thursday. This surge follows a significant 12% rise on Wednesday, as the semiconductor sector experienced a broad rally amid positive developments in U.S.-China trade relations and increased investor confidence.

The catalyst for this bullish sentiment can be traced back to President Donald Trump's statements on Tuesday, indicating that tariffs on Chinese goods "will come down substantially." This news particularly benefited the semiconductor industry, which has been sensitive to U.S.-China trade tensions. Adding to the positive momentum, renowned investor Cathie Wood's Ark Investment Management made substantial purchases in various chipmakers, including a $1.1 million share acquisition of Nvidia (NVDA).

SOXL, a leveraged ETF that aims to deliver three times the daily performance of the semiconductor sector, saw exceptionally high options trading activity on Wednesday. A total of 495,518 SOXL option contracts were traded, with call options accounting for 70% of the overall trades, indicating a strongly bullish sentiment. The $11 strike call option expiring on Friday attracted particular attention, with 32,892 contracts changing hands. This heightened options activity and the overall positive sentiment in the semiconductor space appear to be fueling SOXL's pre-market surge, as traders anticipate continued strength in the sector.

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