Nvidia Bulls Pour Millions of Dollars in Options Market After Shorts Climbed

Unusual option trades tracked by moomoo showed 17 big bullish transactions were posted in the first three hours after the market opened Thursday. The biggest of them involved an active buyer paying a $5.86 million premium for call options that give the holder the right to buy 330,000 Nvidia shares at $110 by Dec. 20.

Lower rates are seen as positive for stocks since they pave for interest expense for companies, while improving their access to cheaper debt needed for expansion. The rate cuts could also unleash investments parked in money market funds that could find their way into equities.

Nvidia shares rebounded a day after its total short volume climbed 9.3 million shares to 25.45 million, the biggest among U.S. stocks, exchange data tracked by moomoo showed. As 11:38 a.m. Thursday, inflows into the stock outpaced outflows by $886.2 million. That adds to this month's net inflows of $2.45 billion.

Nvidia shares advanced 5.1% to $119.19 at 12:22 p.m. in New York, breaching the middle line of the Bollinger Band. That could be viewed by some who study charts that the trend may be turning bullish. But not all technical indicators are in agreement.

Five of 15 technical indicators tracked by moomoo are showing warning signals, while nine are showing no obvious signals. Only the Bollinger Band is flashing a positive sign.

William Blair analyst Sebastien Naji, who recently initiated coverage of Nvidia with a buy rating sees more upside for the stock. While the company has been an investor darling for its leadership in graphics processing units (GPUs) used in artificial intelligence, Naji said the company's edge goes beyond its state-of-the-art processors, according to a Market Watch report.

"Companies like Nvidia do not view themselves as chip providers but rather as builders of entire computers, where the integration of chips, storage, networking and software plays a key role in driving performance improvements," Market Watch quoted Niji as saying.

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