Situational Awareness rebuilds large AI call-option bets

Situational Awareness has rebuilt large call-option positions after a steep technology sell-off in July, buying calls tied to AMD, CoreWeave, SK Hynix, SanDisk and Bloom Energy. The fund’s option purchases involve premiums running into the hundreds of millions of dollars.

An investor letter shows the fund delivered a 439% net return between the start of 2026 and June 30. That performance was achieved while using roughly four times leverage. When AI-related equities fell in July, the fund recorded a decline of about 67% and was forced to unwind many of its stock holdings. A large trading firm subsequently acquired a substantial portion of the fund’s public-equity positions.

Call options give the holder the right to buy a stock at a set price before a set date. The fund’s new option positions target companies tied to AI infrastructure: AMD for processors, CoreWeave for GPU-focused cloud capacity, SK Hynix and SanDisk for memory and storage, and Bloom Energy for power generation and grid services that support data centers.

Options can increase gains if the underlying stocks rise and can produce large losses if they fall. Large premiums and concentrated exposures raise sensitivity to market swings and to changes in implied volatility. The purchases were made after the fund partially liquidated equity holdings following the July decline.

Investors and risk managers are monitoring how the fund manages leverage and position sizing given the role of high leverage in the earlier drawdown. The performance of the targeted companies and broader sentiment in technology and AI-related markets will affect the outcome of the option positions.