shares of Nvidia It fell slightly on Tuesday after a WSJ report raised questions about OpenAI’s growth goals and the AI complex as a whole.
Option traders took advantage of the stock sell-off to make bullish bets that the stock would return to all-time highs.
Until Tuesday, Nvidia options were trading at a lower price than they are now. VanEck Semiconductor ETF (SMH)the result of a narrow trading range for much of the past year. The situation changed today as implied volatility rose along with price and traders flocked to the stock with a mostly bullish bias.
Traders now expect Nvidia’s stock price to rise more than 10% by the end of next month, based on the at-the-money straddle price, which expires on May 29, one week after the company’s earnings release. According to Spot Gamma data, Tuesday’s call volume was more than double that of puts, and premiums were heavily skewed toward calls, with $648 million of the total $818 million spent on calls.
Nvidia, 1 month
Still, traders are taking a more cautious approach at NVDA compared to some of its peers. The biggest trades in Nvidia were mostly spreads that combined buy and sell calls. Specifically, there was a buyer of a 200/260 call spread that expires next March.
NVDA stock is expected to rise to $260 by March 2027, or 21% from here.
