Big Short Entry, NVIDIA Facing Short-term Crisis
Bad news: Dropping to 115.
Good news: The pain may last only until next week.
After 1 PM on Thursday, NVIDIA suddenly accelerated its decline. During the drop, bearish options $NVDA 20250307 115.0 PUT$ saw significant volume, with a transaction volume of 448,200 contracts and newly opened positions reaching 174,700 contracts.
The estimated transaction amount is over $20 million, which is extremely rare for short-term out-of-the-money options to reach this level.
According to the options open position details, $NVDA 20250307 115.0 PUT$ ranks first in bearish open positions.
The leading data for bullish open positions focuses on the expiration dates this week and next week. Among them, most of the bullish open positions expiring next week come from institutional spread strategies, suggesting NVIDIA's stock price is expected to fall below 130 next week.
By observing the open interest data for options expiring next week, it can be seen that bearish strike price positions are quite extreme, ranging from 70 to 115.
Generally speaking, barring unforeseen events, 115 is the target price for this round of declines. However, this drop is mainly influenced by the market pullback, essentially replicating the tariff-related drop earlier this month. It is speculated that those buying 80 puts are betting on additional black swan events causing a major crash, similar to August last year.
If there are no surprises, 115 positions will likely be closed or rolled over by Friday or Monday, as expiring options cannot be held for too long.
Unfortunately, I sold puts at 110 too early yesterday, but it shouldn’t be a big issue. On the surface, the reason for the drop is the tariff implementation, but in reality, it’s related to triple witching options expiry. NVIDIA's earnings are solid, and those with available funds should consider bottom-fishing. For more conservative investors, selling puts could also be a good strategy.
The critical timing for Tesla is also next week. The large order I am most concerned about, $TSLA 20250620 370.0 PUT$ , has not been closed yet.
The bearish 180 puts expiring next week, with 26,600 open contracts, can be ignored as they are part of a rolled leg from a combination strategy. There is no significant long-term open interest, and both bulls and bears are focused on March.
$China Overseas Internet ETF-KraneShares(KWEB)$
KWEB is also bearish in sync. The 33 puts expiring next week have 44,900 open contracts. Interestingly, the current trend is somewhat reminiscent of January 13th.
$China Large-Cap ETF-iShares(FXI)$
There’s nothing particularly notable about FXI. The 39 calls expiring in June represent a rolled sell call position.
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