also look at option implied volatilities of leap options expiring dec 2026

``` The deep research logic is organized as follows: Okay, let's tackle this question. The user wants an analysis of SMCI stock, specifically looking at the option implied volatilities of leap options expiring in December 2026. They also want a prediction based on numbers, facts, and growth expectations for the price by the end of December 31, 2026. First, I need to check the provided references. The user has given several references, including option data for SMCI with expirations in December 2026. Let's look at the data in References 1 and 6. Reference 1 lists put options with high implied volatilities, some over 150%. Reference 6 shows call options with IVs around 60-70%. Also, Reference 10 compares puts and calls for the same expiration, showing higher IVs in puts. The user's previous answer provided a price target of $80–$100 by December 2026. Now, incorporating the option data, I need to see how implied volatility relates to expected price movements. High IV in puts suggests bearish expectations, while lower IV in calls might indicate less bullish sentiment. The put-call skew (puts having higher IV than calls) could imply a negative outlook or anticipation of downside risk. I should also consider the recent news about SMCI's partnerships, like the AI server deal with Digi Power X mentioned in References 11 and 14. Positive news might drive the stock up, but the options data shows high IV, which could be due to uncertainty around these partnerships or upcoming events. The user's previous analysis mentioned financial health, strategic partnerships, market context, and valuation. Now, adding the options data, I need to reconcile the high IV with the growth projections. Maybe the market expects significant volatility around SMCI's earnings or product launches, which could affect the stock price. I should structure the answer by first presenting the conclusion based on the options data, then delve into the analysis. The conclusion should mention the expected price range considering the implied volatility. The analysis should break down the put and call IVs, the skew, and what that means for the stock's potential movement. Also, tie in the recent positive news and financial metrics to see if the high IV is justified or if there's a mispricing opportunity. Make sure to cite the references properly, using the exact numbers provided. Also, include the visualization for the query mentioned in the references. The user wants a markdown table, so I'll format the data accordingly. Need to ensure the language is professional but engaging, using emojis as per the requirements. Finally, check if there's any conflicting information. For example, the high IV in puts might suggest bearish bets, but the recent partnerships and growth projections are bullish. This could create a mixed outlook, so the analysis should address both sides, perhaps suggesting a cautious approach or highlighting the risks and opportunities. ``` ### **Conclusion** **SMCI (Super Micro Computer)** exhibits **extremely high implied volatility** in its December 2026 leap options, reflecting significant market uncertainty about its future trajectory. The **put options** dominate the volatility skew, with implied volatilities ranging from **74.26% to 152.17%**, while **call options** show lower implied volatilities (~60-70%) . This **asymmetric volatility skew** suggests **bearish sentiment** among option traders, anticipating potential downside risks despite SMCI’s recent AI-driven growth momentum. Based on the data, **SMCI’s stock price could range between $75 and $100 by December 31, 2026**, with a **higher probability of downside** due to the elevated put volatility. --- ### **Analysis** #### **1. Implied Volatility Breakdown** | Option Type | Strike Price | Implied Volatility | Open Interest | Trading Volume | Key Observations | |--------------|--------------|--------------------|---------------|----------------|-------------------| | **Put** | $42 | 74.26% | 359 | 0 | High IV, low liquidity | | **Put** | $52 | 71.04% | 847 | 3 | Moderate IV, higher liquidity | | **Put** | $84 | 152.17% | 24 | 0 | Extreme IV, speculative bets | | **Call** | $75 | 70.06% | 1089 | 85 | Lower IV, higher liquidity | | **Call** | $80 | 67.2% | 4454 | 52 | Balanced IV, dominant strike | **Key Takeaways**: - **Put Options**: The highest implied volatility (~152.17%) is concentrated in deep OTM puts ($84 strike), suggesting **anticipation of a sharp decline** in SMCI’s stock price. - **Call Options**: The IV for calls is significantly lower (~60-70%), indicating **less confidence in upside** compared to puts. - **Skew**: The **put-call IV spread** (152.17% vs. 70.06%) highlights **bearish sentiment**, likely driven by concerns over SMCI’s **high debt levels**, **competition from NVIDIA**, and **execution risks** in its AI partnerships . --- #### **2. Market Sentiment & Risks** | Metric | Data (2025-07-29) | Implications | |----------------------------|---------------------|--------------| | **Put/Call Ratio** | 0.75 | Neutral-to-bearish sentiment | | **Open Interest (Puts)** | 506 | Dominance of bearish bets | | **Trading Volume (Puts)** | 0-3 | Low liquidity in most strikes | **Risks**: - **Execution Risk**: SMCI’s $20 billion AI partnership with DataVolt faces delays in Saudi infrastructure timelines . - **Competition**: NVIDIA’s dominance in AI chips (36% market share) could limit SMCI’s ability to diversify . - **Financial Health**: SMCI’s debt-to-equity ratio (38.1%) and negative free cash flow raise concerns about solvency . --- #### **3. Price Projection** | Scenario | Probability | Price Range (2026-12-31) | Rationale | |----------------|-------------|---------------------------|-----------| | **Base Case** | 60% | $80–$90 | Balanced view of AI growth and execution risks | | **Bull Case** | 20% | $90–$100 | Successful DataVolt deal and margin recovery | | **Bear Case** | 20% | $75–$80 | Regulatory headwinds, supply chain disruptions | **Final Forecast**: SMCI’s stock price is **likely to trade between $75 and $100** by December 2026, with a **higher probability of downside** due to the elevated put volatility and execution risks. --- ### **Conclusion** **SMCI’s December 2026 leap options reflect a market divided between bullish AI growth prospects and bearish execution risks**. The **asymmetric volatility skew** (high IV in puts, low IV in calls) suggests **caution** for long positions, with a **target price range of $75–$100** by December 2026. Investors should monitor SMCI’s progress in its AI partnerships and balance sheet health closely.