Phase Space AI

Trade Construction

Hut 8 [HUT]

Hut 8 Corp. [HUT] — Trade Construction

As of: 2026-07-29 · Spot: $88.165 (2026-07-29 close) · Framework: v1.5.1 / criteria.md 2026-07-29

This memo issues no position verdict — no Long, Short, Watchlist or Avoid. It scores Criteria and outputs an analysis. Whether this analysis justifies a position is a question about a particular book, and the book decides. What follows are the constraints any position would face, not a recommendation.


1. Liquidity Criteria (BINDING)

Value
Shares traded 2026-07-29 393,674
Dollar volume $34.71m
Verdict PASS — the second-most liquid name in the cluster

2026-07-29 was a high-volume down day across the entire complex, so this figure is generous relative to a normal session. Liquidity constrains position sizing, never admission (criteria.md).

2. Options — NO STRUCTURE PROPOSED

No options chain was pulled for HUT. Liquidity Criteria is explicit: "Any proposed options structure requires the actual chain pulled first — open interest and quoted size for the specific strikes and expiry… A vehicle that cannot be filled is not a vehicle." The HCA precedent (maximum open interest of 18 contracts across an entire March-2027 chain) is why this is a hard rule rather than a preference.

Accordingly no strikes, expiries, Greeks or structures are proposed. Doing so without the chain would manufacture an uninvestable vehicle. Pulling the HUT chain from data.alpaca.markets/v1beta1/options/snapshots is a prerequisite to any options expression.

3. Vehicle constraint if a position were taken

Common stock only, until a chain is pulled and open interest and quoted size are verified at specific strikes.

4. Sizing constraint — inverse volatility

criteria.md names inverse-volatility sizing as the active protection on the Downside Criteria, "because a fat-left-tail name is almost always a high-volatility name and is sized down automatically."

Value
252-day realised volatility (screen record) 104.7% (scan_v3 vol_252d_pct)
Implication among the highest in any book; inverse-vol sizing cuts this hard
One-day move, 2026-07-29 −12.8%

5. The correlation constraint that dominates everything else

On 2026-07-29 every name in this complex fell together:

HIVE HUT IREN CORZ BTDR WYFI SHAZ CRWV APLD NBIS WULF CIFR RIOT MARA CLSK
−11.1% −12.8% −13.5% −12.4% −13.1% −12.7% −10.9% −9.6% −12.7% −13.7% −12.8% −13.3% −14.0% −11.6% −10.8%

Fifteen names, one factor, a 4.4pp range. Any two positions in this cluster are effectively one position. This is a book-level exposure and correlation-limit question, not a single-name question, and it must be resolved by portfolio-book before any HUT position is sized. Treating cluster members as independent names would breach the correlation limit while appearing diversified.

6. Invalidation — the observable that would refute the thesis

Confirming observable: the AI/HPC line inside the Compute segment moving materially off ~$3.9m/quarter, and — necessarily — a named AI counterparty with contracted megawatts and disclosed remaining performance obligations appearing in a filing. HUT currently discloses none of those three things.

Refuting observable: a third consecutive quarter of sequential revenue decline (revenue has already gone 88.5 → 71.0), or G&A remaining above revenue (Q1 2026: $81.7m of G&A on $71.0m of revenue). Either confirms that the cost base has been built for a business that has not arrived. Separately, a bitcoin drawdown that widens the gap between the $360.9m miner purchase liability and the $210.8m of pledged bitcoin securing it would be a direct, mechanical impairment.

7. What must be resolved before any position

  1. Establish whether any AI/HPC contract exists. No counterparty, no contracted MW and no RPO are disclosed. At 586.9x annualised AI revenue this is the whole question, and it is answerable from a filing.
  2. Quantify the remaining bitcoin encumbrance. 3,090 BTC ($210.8m) are pledged to Bitmain against a $360.9m liability, and a further amount is pledged as collateral under a borrowing arrangement — the second figure was not extracted here. Free versus encumbered treasury changes the floor materially.
  3. Establish the power contracts for the remaining sites after the Far North disposal. Not disclosed in the Q1 2026 10-Q reviewed.
  4. Pull the options chain before contemplating any non-linear expression.
  5. Resolve the cluster correlation limit with portfolio-book.