Futu Holdings Plunges 4.68%: What's Brewing in the Options Market?

Summary
• FUTU opens at $163.97, plunges to $154.36 intraday low before settling at $155.05
• Turnover surges to 1.91M shares with 1.77% turnover rate
• Put options dominate volume with FUTU20250808P147 leading at 2,058 contracts traded
• 52-week range of $51.80-$174.36 highlights extreme volatility potential

As Futu Holdings tumbles nearly 5% in post-market trading, the stock's sharp decline has ignited a frenzy in the options market. With a 15-point drop from its opening price and a 200-day average of $103.29, the stock's trajectory has triggered a cascade of put options activity. This volatile session follows a pattern of high leverage and implied volatility across the options chain, suggesting market participants are positioning for continued downside risk.

Options Frenzy and Put Volatility Drive Sharp Decline
The dramatic 4.68% drop in FUTU can be directly attributed to the options market's bearish positioning. The FUTU20250808P147 put option alone saw 2,058 contracts traded with an 82.73% price change ratio, indicating massive liquidation of short-dated puts. This contract's -0.248 delta suggests moderate directional sensitivity while the 48.42% implied volatility ratio indicates significant price uncertainty. The concentrated put volume at the $147 strike (13 contracts traded) suggests institutional positioning for a potential $10+ drop before the August 8 expiration. This bearish technical setup, combined with the stock trading below all major moving averages, created a self-fulfilling prophecy of selling pressure.

Internet Retail Sector Weakness as Robinhood Drags
The Internet Retail sector is showing broad weakness with Robinhood Markets (HOOD) down 1.43% intraday. While FUTU's decline appears more pronounced, the sector's overall bearish tone suggests systemic risk factors. The sector's exposure to macroeconomic pressures and regulatory scrutiny is evident in the defensive positioning seen across options chains. However, FUTU's specific technical pattern - with price below the 30-day SMA of $121.83 and 200-day SMA of $108.68 - indicates a more severe near-term correction than typical sector declines.

Bearish Positioning and Lending Ratio Analysis
• 200-day average: $103.30 (well below current price)
• RSI: 77.72 (overbought territory)
• MACD: 12.47 (bullish divergence but signal line at 11.37)
• Bollinger Bands: $111.64-$179.41 (price near lower band)
• Gamma: 0.029154 (high sensitivity to price moves)
• Put/call ratio: 2.5:1 (extreme bearish bias)

Key technical levels to watch include the 30-day support at $121.83 and 200-day support at $108.68. With RSI in overbought territory and price near the lower Bollinger Band, the stock shows classic signs of a corrective move. The most compelling options play is the FUTU20250808P147 put option, which offers a 77.08% leverage ratio with 48.42% implied volatility. This contract's -0.248 delta balances directional sensitivity with optionality, while the -0.067 theta suggests reasonable time decay. The 2.43 gamma indicates strong responsiveness to price moves, ideal for the current volatile environment.

• FUTU20250808P147 (Put): $147 strike, 2025-08-08 expiration
- IV: 48.42% (moderate volatility)
- Leverage: 77.08% (high)
- Delta: -0.248 (moderate bearish exposure)
- Theta: -0.067 (reasonable time decay)
- Gamma: 0.0243 (high sensitivity)
- Turnover: 2,058 contracts (high liquidity)
- Payoff at 5% downside: $10.05 (max profit if price drops to $149.53)
This put option stands out due to its optimal balance of leverage and directional exposure. The moderate delta allows for meaningful participation in a potential drop while the high gamma ensures the option remains responsive to price swings. With 2,058 contracts traded, liquidity is strong enough to execute significant positions.

• FUTU20250808C147 (Call): $147 strike, 2025-08-08 expiration
- IV: 60.93% (moderate volatility)
- Leverage: 13.83% (moderate)
- Delta: 0.7118 (strong bullish exposure)
- Theta: -0.5308 (high time decay)
- Gamma: 0.0208 (moderate sensitivity)
- Turnover: 40,320 contracts (extremely liquid)
- Payoff at 5% downside: $0 (no intrinsic value if price drops below $147)
While the call option offers less leverage, its extremely high liquidity (40,320 contracts) makes it an attractive hedge against the put position. The 71.18% delta provides strong directional exposure if the stock recovers.

Given the current technical setup and options activity, aggressive position sizing in the FUTU20250808P147 put option is warranted for those anticipating a continuation of the decline. The high leverage and moderate delta position traders to profit from a potential drop below $147 while maintaining optionality for further moves.

Backtest Futu Holdings Stock Performance
After an intraday plunge of -5% for FUTU, the stock has historically shown positive short-to-medium-term gains. The backtest data reveals favorable win rates and returns over various time frames:1. 3-Day Win Rate and Return: The win rate is 51.94% with an average return of 0.99% within 3 days. This indicates a higher probability of a positive rebound in the short term.2. 10-Day Win Rate and Return: The win rate increases to 52.10% with a slightly higher average return of 2.75% over 10 days. This suggests that FUTU tends to recover and even exceed its pre-plunge levels in the medium term.3. 30-Day Win Rate and Return: The win rate rises to 56.45% with a notable average return of 7.64% over 30 days. This indicates that FUTU often experiences a substantial recovery in the longer term, with the potential for a maximum return of 14.03% on day 59 after the plunge.In conclusion, FUTU has shown favorable performance after an intraday plunge of -5%, with a high likelihood of positive returns over various short-to-medium-term horizons. This makes it an attractive opportunity for traders looking to capitalize on rebounds following significant dips.

Position for 8-Week Volatility with Strategic Put Play
The sharp decline in FUTU has created a compelling short-term trading opportunity, particularly for the FUTU20250808P147 put option. With the stock trading near its 52-week low and below all major moving averages, the technical indicators suggest continued downward pressure in the near term. The sector weakness highlighted by Robinhood's -1.43% intraday move reinforces the bearish environment. Traders should closely monitor the $147 support level, where the put option provides maximum leverage and directional exposure. The high gamma and moderate delta position traders to profit from potential volatility while maintaining flexibility in a rapidly changing market. Immediate action is recommended for those seeking to capitalize on this short-term correction.