Nvidia Sees $150M Call Option Block Trades That May Signal Optimism Rally Can Last
$NVIDIA(NVDA.US$ saw $150 million in combined block trades in call options that may signal optimism that there could be more juice left to the meteoric rise of the AI-favorite.
Nvidia's record-breaking rally pushed its market capital above $3 trillion yesterday, surging past Apple to monetarily become the second most-valuable company. While shares are down 1.7% at $1,203.73 as of 11:41 a.m. in New York Thursday, the price is still more than triple its level a year ago.
The frenzy was fueled by investor enthusiasm as Nvidia continued to deliver quarterly financial results that blew past estimates amid surging demand for chips that power artificial intelligence applications. Adding to the excitement was the 10-for-1 stock split set to be implemented after the market closes tomorrow, making Nvidia more accessible to retail investors.
At 10:34:04 a.m. in New York Thursday, two block trades were posted for call options expiring Dec. 18, 2026. In one of the trades, the buyer paid a premium of $71.67 million for options that give the holder the right to buy 417,000 Nvidia shares at $2,280 each.
In the other trade, a seller stands to collect a $78.67 million premium for writing call options that give the holder the right to buy 278,000 shares at $1,640 each.
Of course, the number of shares and the strike price will adjust according to the stock split once it's implemented after the close Friday. When trading resumes on June 10, in general, Nvidia holders will get nine additional shares for every share they owned prior to the stock split while the price will be 90% below the close on June 7. Read here to learn more about stock splits.
Not everyone is bullish. Before 11 a.m., six block trades were posted where buyers paid a combined $16.26 million in premiums that could shield the holders from a potential correction in the stock price.
The biggest of those block trades was for put options that give the holder the right to sell 169,000 Nvidia shares at $1,100 by July 19. The seller stands to collect a $5.03 million premium for writing those options.
As of 11:27 a.m., Nvidia saw a net capital outflow of $1.07 billion, with small orders leading the charge, data compiled by moomoo showed.
Eleven of the 15 technical indicators tracked by moomoo are already signaling that the stock is overbought, and the trend could turn bearish. But of course, technical indicators aren't always correct in predicting the next direction that a stock price will take.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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mooomoney : Nvidia will continue momentum up after split more people can buy between 100 150 than 1,000 to 1,500 per share
101550592 :
Upper 90 mooomoney : The counter to this is that it will be cheaper to short too. The stock can't just keep going up. I forecast it will go down between $100 to $108 just like Apple did a couple years ago. People will be bearish and it will create energy and squeeze up for the next earnings.
Paul Anthony Chin : watch on the best person to see if you have received this message and your help me tq Sir God bless All you need
74356401 : Moved after holding the right hand for two weeks