SMH SMH options offer diversified semiconductor exposure with high beta, AI narrative dynamics, and excellent liquidity for sector-level options strategies.

SMH captures the entire semiconductor value chain — NVDA, AMD, AVGO, TSM, ASML, and more. It's a popular alternative to single-stock risk in the AI trade.

SMH Options Characteristics

Avg Daily Volume

500K+ contracts

Typical Spread

$0.02-0.05

Typical IV Rank

25-50%

Expirations

Weekly, Monthly, Quarterly, LEAPS

Price Range

$200-280

Correlation

Very high correlation with NVDA, AMD, and semiconductor sector

Best Strategies for SMH

Iron Condors

Sector-level premium with diversification

Bull Call Spreads

AI semiconductor growth thesis

LEAPS Calls

Long-term AI infrastructure investment

Put Spreads

Bullish income on semiconductor support

Calendar Spreads

Trade around NVDA/AMD earnings via ETF

AI Semiconductor Basket

SMH provides diversified AI chip exposure without single-stock risk. NVDA is the top holding (~20%), but the ETF spreads risk across the semiconductor value chain.

SMH Options FAQ

Should I trade SMH or NVDA options?

SMH offers diversified semiconductor exposure with lower single-stock risk. NVDA has higher beta and more dramatic moves. Use SMH for sector-level views; NVDA for company-specific conviction. SMH smooths out individual earnings volatility.

How does SMH move on individual chip earnings?

NVDA earnings can move SMH 3-5% (its largest holding). AMD, AVGO, and TSM also create moves. SMH IV rises ahead of major chip earnings season, creating premium-selling opportunities.