Sometimes, you may notice unusual options activity when you see a large drop or spike in the VIX. very Bearish — Traders hitting the buy button repeatedly are looking to cash out further downside. But today, general buyers have come on board. buy The decline with options was no greater than that of the NVIDIA whale. That’s what Jon Najarian, co-founder of Market Rebellion and a pioneer in the unusual options movement, came to Fox Business today to talk about. As he said, “make money” host Charles Payne, he asked an important question.
Nvidia was primarily responsible for today’s red market actions. On the final day of a 10-week bull market with a weekly RSI above 89, Nvidia fell more than 4%, its worst day since October 2022. This comes amid rumors of an impending Nvidia stock split.
But instead of running for the hills with a bunch of other investors and traders, what we call traders; nvidia whale We stepped into a really huge deal.
Approximate purchase worth $1 billion $820 strike call option expiring in June. This isn’t their first deal either. Back in late February 2023, the buyer purchased 31,500 $720 strike calls expiring in May, worth about $300 million at the time.This was a roll from that This trade was a roll from a previous trade at the $680 strike before that.
Here’s Jon’s take on the deal and the Nvidia whale:
They bought these earlier in the day. And based on option volume analysis, it doesn’t seem like the second half of this decline is keeping them out of this trade.
But who is the NVIDIA whale?
One possibility is someone like Susquehanna International Group. This is he one of the largest options trading companies in the world. At the time of his last 13-F filing, Susquehanna International held a position in his Nvidia call options worth more than $10 billion. That was in December 2023. That is, if they still hold the position. already We expect astronomical profits. The fund also held his $1.58 billion position in NVIDIA stock. This is his second largest single stock position (No. 1 is Microsoft). That said, Mr. Susquehanna also owns a large number of put options in Nvidia, which makes his case a little less clear.
Another possibility is someone like Blacklock. In his previous 13-F filing, BlackRock revealed that he had a huge stake in his Nvidia worth $88 billion, making him one of the absolute biggest investors in this chip giant. Ta. A significant number of the shares are addition Nvidia’s call option is worth $447 million. This 13-F filing was also made in his December 2023, so the amounts associated with these options are well in line with the size of previous option trades identified in this name leading up to this roll. . At the time, Nvidia was BlackRock’s largest single stock holding in non-ETF options.
But that’s not all. The possibilities are almost endless. For example, the list below shows five more funds with billions of dollars of his Nvidia call option positions.
- jane street group
- Citadel Advisors
- IMC-Chicago LLC
- Simplex Trading LLC
- goldman sachs
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The problem with these five, however, is that, like Susquehanna, they hold large amounts of put positions.
Another possibility is a wealthy individual investor like legendary investor Stanley Druckenmiller of the Duquesne Family Office. Mr. Druckenmiller acquired more than $400 million worth of NVIDIA call option positions last quarter, according to recent 13-F filings.
So, are you an individual investor?
The real answer is we don’t know Which major investors made this deal? The question of who Nvidia’s whale is will likely remain a mystery, and that’s okay.What matters is what we know it is there.
Regardless of who bought this large amount of Nvidia call options, you can take advantage of this trade and ride along with it by harnessing the power of extraordinary options activity. Considering this trade is a very expensive open, you can also augment it. For example, instead of going to the June expiry when these options were purchased and taking a deep-in-the-money call, you could limit the risk and take an at-the-money call on the debit spread to reduce the risk. You may also consider purchasing the . The capital required to conduct a trade (in exchange for limiting potential profits).
Also important, this options trading. By using options, this investor limited the risk The stock price has soared, leaving room for unlimited potential profits if the semiconductor giant continues to rise further. They didn’t back down when Nvidia continued to fall. Perhaps it’s because they know the risk in this stock-exchange-style trade is significantly lower than in seeking the same leverage using stocks.buy 3.7 million shares To gain similar control over stocks.That’s the power of options, and why John and Pete Najarian call their new book it’s not option – That’s because do not have Options that trade only on stocks. Options allow traders to limit their risk-gain leverage upwards as well as make nuanced trades for a variety of different price outcomes.
So instead of asking the question “Who is the Nvidia whale?”, ask yourself:
“why Did they make this deal? ”
“what What method did they choose to make this deal? ”
“how Can I use the information in this transaction to my advantage?”
Questions like this will help you become a better equipped and more skilled trader.
Want more unusual options activity insights like this one, with trade ideas created by professional options analysts and former floor traders? Check out Market Rebellion’s unusual options activity service below.