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Three looks at the same tape today. Pre-market, POET Technologies (POET) at $4.59 on a sector bounce with an options board that had nothing on it. Late morning, $4.72 on 2.5 million shares with calls four to one over puts. Early afternoon, $4.84 on 5.76 million shares, calls six to one, and one print that reads like a bet instead of a chase: 3,720 November 20 $5.50 calls traded on 1,068 open. $5 is 16 cents away. Five sessions remain after today before the November 16 release.
How we got here. Thursday was the worst day the AI complex has had since 2020, and the Nasdaq finished in correction. POET closed at $4.26, which put the whole company below the cash it reported in June. This morning the chips bounced before the bell and POET rode the same elevator. The October jobs number came in hot at 8:30, 165K against 65K expected, and futures gave some back. POET didn't. It walked higher all day, through every level we flagged this morning except $5.
Three readings, one book
Pre-market was a cleanup board. Today's expiry had 11,000 calls from $5 up that were bought at five and six dollars for a bounce that showed up a week late, a two-sided fight at $4.50 (919 calls, 1,480 puts), and max pain at $4.50. November 20, the expiry that owns the print, had 40,513 calls open with 32,266 of them at $7 and above, dead from here, and 10,000 puts in the money. The only growing put line was the $4 strike, 3,961 open. January was the fuel: 26,938 calls at $5, 47,221 at $7, 64,198 at $10.
By late morning the options were chasing the stock. The $4.50 calls expiring today traded 893 in the money and were being cashed. The November 20 $4 puts traded 254. The $6.50 and $7 November calls traded 424 between them, cheap tickets on the print. January's $11 calls traded 304. Calls over puts, four to one.
By early afternoon it was six to one, about 10,800 calls to 1,800 puts across the four boards we track. Today's $5 calls traded 1,170 on 874 open, day traders playing a $5 tag into the close. The $4.50 calls traded 1,230. The November 13 $5.50 calls traded 1,190 against a 3,915 stack. January's $10 calls traded 409 and its $5 calls 252. The one line still pointing down was January's $4 puts, 449 traded on 5,396 open, which is someone paying for cover under $4 with ten weeks on it. And then the print: 3,720 November 20 $5.50 calls, 3.5 times the open interest on that line, 372,000 shares of notional at a strike 14% above the stock. Part of it could be the November 13 stack rolling out past the release, but the sizes don't match. Most of it is new. Monday's open interest settles what it was.
What dealers need to suppress a move
Dealers don't pick a side. The book picks it for them. When customers own the calls, dealers are short them, and as the stock rises through the strike they have to buy shares to stay hedged. That's the accelerant everybody means when they say gamma squeeze. When customers sold the calls, overwriters and spread sellers, dealers are long them, and they sell shares into the strike as the stock approaches. Same contracts, opposite flow. A pin is the second case. We wrote about the put side of this book when the Fed hiked; today it's the call side that matters.
To hold POET under $5 into today's close, the book needs three things. Today's $5 calls, 874 open and 1,170 traded, have to be in dealer hands, so every approach to $5 gets sold. The last hour has to go quiet, because a few hundred thousand shares of hedging can steer a thin tape and can't steer a 5.76 million-share day. And the pin has to sit between $4.50, today's max pain, and $5, which is where today's two-sided open interest lives. If the stock is still pressing $4.95 on volume at 3:30, the dealers aren't suppressing anything. They're buying.
Same logic on the $5.50 print. If those 3,720 November 20 calls were sold to dealers by someone overwriting stock, the dealers are long $5.50 calls through the release and they'll lean on the stock there. If they were bought, the dealers are short them and $5.50 turns from a lid into an accelerant. The contracts are identical. The flow is opposite. Price action around $5.50 next week tells us which.
What bulls need to make the dealers hedge
A close over $5 today. It settles today's $5 calls in the money and puts Monday's open on top of the January $5 strike, where 26,938 calls carry about 500,000 shares of gamma per dollar by our model. That's the biggest single line on any board. We asked for $5 by the November 13 close this morning. The stock is 16 cents from delivering it a week early.
Monday's open interest. If the November 20 $5.50 calls print above 4,700 open, the event board finally has a live call line, about 170,000 shares of gamma per dollar, instead of a dead stack above $7. If the November 13 $5.50s dropped by a similar amount, it was a roll. Same bet, moved past the release.
Price through the strikes, not just to them. From $4.84, on a customer-long book at a round 100% implied vol, the model dealer demand runs about 650,000 shares to $5, about 2.7 million to $5.50 and about 4.9 million to $6, with January carrying roughly 70% of it. The demand is back-loaded. Most of it arrives between $5 and $6, which is why $5 was the ask and $5.50 is the next one.
A thinner tape at the strike. Dealer buying moves price when it's a large share of the volume. Today's 5.76 million shares swamp it. A Monday open above $5 on a quiet tape doesn't. Bulls want the gap, not the grind. And they want the sector to stop being the story, because when chips sell off POET goes with them no matter what the board says.
Monday's checks
The November 20 $5.50 calls against 1,068 open. Above 4,700 says the print opened and the event board has a live line. Back near 1,068 says it closed or was sold.
The November 13 $5.50 calls against 3,915 open. A drop near 1,190 says the November 20 print was a roll past the release. Flat says it was fresh money.
January's $4 puts against 5,396 open. Growth says the cover for the print is being placed in January, with ten weeks on it, instead of November.
The November 20 $4 puts against 3,961 open. 255 traded today and the line barely moved. If it stays flat, the downside map below $4 stays empty through the release.
Today's settle against $5. Over it and the 874 $5 calls get paid while the 329 $5 puts expire worthless. Under it and the day pins between $4.50 and $5, which is exactly what a dealer-long book would want.
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