DeepSeek Pops the AI Bubble
January 27, 2025
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–Live by AI, die by AI
–All about DeepSeek this morning, with Nasdaq futures currently down 4.2% (-922 points at 20989).
From BBG:
“The buzz over DeepSeek emerged over the weekend, with tech analysts saying the company’s AI model provides comparable performance to the world’s best chatbots at a fraction of the price. For stock traders, it draws into question the sky-high valuations for AI-related stocks and Silicon Valley’s business model of massive research and development spending.”
–NVDA down around 12%.
–From Friday: A couple of large trades: Buy 50k TYH5 108.5c 0’41 covered 108-11 with 47 delta, synthetic 1’28 in 108.5^. This is an add. On Jan 14 Tuesday bought about 100k TYH5 108.5c ’28 covered average 107-10, 30d. On Wednesday Jan 15, there was a buyer of 40k TYH5 109c 0’35 covered 108-09, 36d. Vol imploded this past week… But it’s surging now, with atm TYH5 109.25^ 1’35/1’36 or 6.84. On Friday I marked the atm TYH5 108.5^ at 1’26, 5.9 without weekend time value and 6.1 as of Sunday.
–Also a buyer of 75k Feb VIX 22 c for 0.75. This one also looks…. prescient.
