Michael Burry Says AI Boom Looks Like a Car Crash. The Options Math on SMH Is Stranger Than That.

本站添加: 2026-05-21

[00:00:00]Michael Bur, the investor famous for calling the 2008 housing crash, says today's AI stock boom looks like the scene of a bloody car crash minutes before it happens. Wow. His argument, Wall Street may be overstating earnings at the biggest tech companies, making valuations look much cheaper than they really are. He says the NASDAQ's real PE ratio could be closer to 43x levels only seen around the dot bubble. At the same time, semiconductors have gone parabolic straight up to the moon. The SOX index just had one of the hottest streaks in history, while money keeps pouring into AI ETFs despite consumer sentiment hitting record lows. But here's the catch. Bur's crash timing has been very mixed over the years. So, is this finally the big one or another early warning in a market that can stay irrational longer than expected? Let's dive in on this episode of Options Math Check.

[00:00:56]So, here we are looking at the Tasty Trade platform here and I've got SMH pulled up. Uh I mentioned semiconductors and if you look at SMH and the chart of SMH, it has gone straight up with very few red days. Uh from the beginning of April, we had a price point of around 370, we'll call it, but it's been a 45 degree angle up and to the right all the way up to 575. And I can't stress this enough. This is an ETF that has gone up 200 points from April to now May 13th.

[00:01:32]An absolutely insane move. And if you zoom out, you can much more clearly see just how aggressive this verticality is on this line. So to Michael's point, uh, I got to say, you know, we've had this massive, massive rally, tons of valuations going through the roof, tons of liquidity being infused into this market. And I think at the end of the day, you could see a complete reversal simply because people are making a ton of money on these things, whether you're buying stock, buying calls, what have you. And you could see that quickly reverse if sentiment changes and we get this kind of macro shift in sentiment and the human aspect comes in where people start to see losses. They already have profits. They're looking at closing positions. So it could certainly happen.

[00:02:20]But let's take a look at the numbers here in SMH specifically. So looking out in June, 36 days to go. I think it's interesting to just check out these strikes that are about 75 points out of the money. So, I'm looking at the 500 strike here and uh it's got an eight premium and a 21% probability of expiring in the money in about a month, which gives it about a 40% probability of touch. Uh probability of touch is just getting tested at any point during the options expiration. So, pretty decent premium here all things considered and a pretty high probability uh for a 75 point out of the money option. That's more than a 10% drop in SMH. Uh that's a big number to the upside. You've got more premium here 965 to 10 bucks. Uh so you're seeing some call skew infused into this market. And it's really interesting because I think this really paints the picture well because we have a higher probability of a downside move or the option being in the money to the downside but a lower premium. And then you go to the upside uh 75 points out of the money brings us to 650 and you've got a smaller in the money probability percentage with a higher premium. So this call skew is certainly a result of the velocity to the upside that we've seen in SMH. But the probabilities are still saying that there's a slight chance that we have a greater probability of being in the money to the downside 70 point 75 points out of the money uh than we do to the upside. But the velocity of this move makes the calls more expensive. So, it's kind of crazy. I don't I don't remember the last time I've seen this, if I've ever seen this, where you've got a higher price on the upside with a lower probability of being in the money. Kind of crazy. Uh, but let's take a look at the end of the year and wrap this up here. So, let's look at the same strikes, 500, 38% probability in the money. We're actually within the expected move. This orange bar here on the Tasty platform just gives you that straddle expected move. uh or a 5050 expected move uh type situation. So down to 425 is where your expected move is.

[00:04:30]We're sitting at 500 looking at this option. 38% probability of being in the money and a $42 price point. I'm curious to see what the 650 looks like.

[00:04:41]Okay. Wow. Uh same story. It's just even more aggressive. So you've got a $53 option up here. 650 strike uh point with a 32% probability of the money. So, this says it perfectly. I mean, uh yes, timing the markets is really tough. Um but the math is what it is. I mean, the the call skew here is very apparent.

[00:05:04]You've got $1,000 plus more premium in the upside. 75 strike uh 75 points out of the money strike at 650. And you've got a lower probability of being in the money. So, if I were to hang my hat on one of these decisions, I would say, yeah, I mean, we've had this massive rally. I would not be surprised to see a pullback. How big that pullback is, like, do I think we're getting back to lows like E- Minis under 6,000, uh, NASDAQ under 25K, I'm not sure. I think over time, especially with low implied volatility, you tend to see these things cluster. Low volatility, I should say, tends to cluster and you you tend to see the market just drift higher. We're going to see periods of of volatility, of course, especially with such a big move to the upside, but kind of wild to see that the probabilities don't reflect the same premium, but again, that's a reflection of the big move we've had to the upside and the call skew that's infused in these markets now. But let me know what you think. Uh, comment down below this video. Please subscribe to the Tasty Live channel and we'll see you on the next options math check.