Option Traders Pile Into Bets Against Software-Exposed Loan ETF

Options traders are betting on further woes for software firms, which are seeing their shares slump again after a Citrini Research report on artificial-intelligence risks for the sector.

Traders are buying put options on a fund that tracks an index of leveraged loans to companies including software sellers such as McAfee Corp. and Proofpoint Inc. Over the past three weeks, the total of bearish options bets placed on the ETF has reached more than 400,000 contracts, or 40 million shares, pushing open interest in puts to the highest since 2023.

On Monday, an investor bought 30,000 April $20 puts ...