A humanoid robot is on display at the booth of American chipmaker Nvidia during the 4th Supply Chain Expo held in China.
Johannes Neudecker | Picture Alliance | Getty Images
Is technology’s biggest sleeping giant about to wake up?
shares of Nvidia The company struggled to make profits even as semiconductor stocks fell 5%. VanEck Semiconductor ETF (SMH)the notable outperformance comes a day after a research report claims the AI leader is at least a year behind in manufacturing its next product line of server racks.
The company’s shares are trading at just under $200, a touted level since late last month, but down 17% from May’s record and up just 4% since the beginning of the year, as investors focus on other AI components such as memory makers.
One thing Nvidia doesn’t have in those stocks right now is bullish options flow.
Nvidia since the beginning of the year
There were more than 1.5 million call trades and fewer than 690,000 puts in Nvidia on Tuesday, with the number of call purchases and put purchases more than doubling, according to ThinkorSwim data. The sector ETF has almost the opposite volume ratio, with puts outnumbering calls almost 4 to 1 in SMH, with traders buying 33,000 puts compared to just 7,300 calls.
At Nvidia, a similar lawsuit was filed Monday after the company disputed a report by SemiAnalysis that its next-generation Kyber server racks were experiencing delays. Calls more than doubled the volume of puts, nearly two-thirds of the $600 million in premium on NVDA options was tied to calls, and the number of calls bought was nearly three times that of puts.
A trading group that appears to have been initiated by a single trader purchased a total of $3.5 million of 200 strike calls expiring at the end of July. These contracts cost just under $7 each to trade, meaning you’ll need about 5.5% more to pay them off by the end of the month.
Traders appear to be hoping that Nvidia’s price will turn higher over the next two days. At the time of writing, all of the top five stocks have calls expiring on Wednesday. According to Spot Gamma data, the most popular option was the 200 Strike, with about 170,000 trades and a total premium of $11 million.
