Options Trading News

November 21, 2012  Wed 12:21 PM CT

Shares of Nvidia are near two-year lows, but an enormous trade is betting on an end to the bleeding.

More than 43,000 NVDA options trade, compared to the daily average of 7,500 in the last month. Puts outpace calls by 10 to 1 in today's session, with almost all of the action in the January 11 puts.

More than 37,000 of those contracts have traded against open interest of 3,513. Blocks of 18,000 and 17,500 were sold in a matter of seconds for the bid price of $0.36, according to optionMONSTER's tracking systems.

NVDA is up 2.35 percent to $11.76 in afternoon trading. Shares of he graphics-chip maker have been trending lower from above $15 in early August and were down at a low of $11.15 a week ago.

The put selling is a wager that NVDA will remain above $11 through the expiration. The trader is also willing to buy shares if they are below the strike, at an effective buying price of $10.64 including the credit from the put sale. (See our Education section)
Share this article with your friends

Related Stories


Momentum bulls stick with Nvidia

November 9, 2015

The graphics-chip maker raised guidance after beating estimates on the top and bottom lines late last week for the second quarter in a row.


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »