PDD Holdings shares closed at $83.03, down 4.13% on the session. Against the backdrop of the stock’s decline, the options market saw notable unusual activity, with multiple block trades exceeding $10 million in premium traded over the past session. Institutional flow was dominated by purchases of deep in-the-money put options, reflecting a broadly bearish bias, with total net premium outlays surpassing $65 million.
Options Metrics
Implied volatility (IV) for PDD Holdings options currently stands at 37.77%, while the IV percentile is 35.86%. That places volatility within a neutral historical range, suggesting option pricing is neither particularly cheap nor excessively expensive.
Meanwhile, the call-to-put volume ratio came in at 0.87, indicating put activity modestly outpaced call trading, in line with the bearish tone reflected in the block flows.
Block Trade Activity
With the underlying stock trading near $82, put options with strike prices of $94, $95, $105, $110, $115, $120 and $130 were all firmly in the money. Institutional positioning showed clear signs of structured bearish strategies.
One notable theme was outright buying of in-the-money puts as a directional bearish play. For example, traders simultaneously bought June 18, 2026 put options at the $115 and $105 strikes, for a combined net premium outlay of approximately $43.74 million. The trades effectively position for — or hedge against — further downside in the stock.
Source: Tiger Trade App
Another key strategy observed was the construction of bear put spreads. In one example, traders bought the June 18, 2026 $130 put while simultaneously selling the $110 put with the same expiration date, resulting in a net premium outlay of roughly $5.94 million.
By purchasing the higher-strike put and selling the lower-strike put, investors established a defined-risk bearish position, capping both maximum loss and potential profit range. The structure reflects a moderately bearish outlook while maintaining tighter control over premium costs.
$PDD Vertical 260618 110.0P/130.0P$
Source: Tiger Trade App
The market also saw more complex multi-leg, cross-expiry positioning. One transaction involved buying September 18, 2026 $130 puts while simultaneously selling and buying May 29, 2026 $95 and $94 puts, respectively, for a net premium outlay of about $15.54 million.
The structure combined longer-dated downside protection through deep in-the-money puts with shorter-dated premium strategies, suggesting a more nuanced positioning approach focused on trading within a defined range rather than expressing a purely directional bearish view.
Strategy Takeaways
For option sellers, the current backdrop of neutral implied volatility and increasingly cautious market sentiment may favor defined-risk spread strategies. One possible approach is selling out-of-the-money puts while simultaneously buying lower-strike puts to limit downside exposure.
Meanwhile, traders seeking higher probability setups may prefer selling farther out-of-the-money options with a lower likelihood of assignment, thereby collecting premium while managing directional risk more conservatively.