Traders work on the New York Stock Exchange on May 28, 2026.
NYSE
The rally in software stocks has gone from a recovery to a rapid bull market, and traders are betting there’s more to come.
The iShares Expanded Tech Software ETF (IGV) is up 35% from its April low after rallying 5% on Friday on double-digit percentage gains ServiceNow And working day. Options traders are building bullish positions on the ETF, where trading is more than five times the 30-day average and call volume exceeds put volume by four to one.
Traders bought more than 50,000 calls on IGV in Friday’s session, compared to just under 6,000 puts. Even after major changes at ServiceNow Salesforce And oracle Call option volumes in every stock on Friday exceeded put volumes by a factor of 5, according to data from ThinkOrSwim.
According to SpotGamma, as of midday Friday, more money was traded in IGV options than in semiconductor ETFs SMH, with $120 million of the $140 million total IGV premium in call contracts.
“We maintain the spread between IGV and SOX and expect this mean reversion to continue,” said Dan Deming, managing partner at KKM Financial. “It was just so dramatic. Our trading is more long software than short semis.”
To be sure, some traders chose to hedge their IGV call purchases with spreads, and some of the day’s largest notional trades were call sales, including a handful of multimillion-dollar sellers of the 90-strike calls expiring in December.
The most popular contract by volume after these 90 strikes was the June 18th 105-strike call, which saw over 20,000 contracts traded. These need a little more than 5% to break even.
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.