To The Moon

$NVDA: The CEO discount. Market +2.35%, chips up, Nvidia alone fell.

Monday in numbers

• NVDA closed at $178.67, down 4.27% (−$7.97). It was down about 7% at one point intraday.

• It was NVDA's lowest close since April, and about $192B of market value gone in one session.

• The rest of the market rallied hard:

– S&P 500 +2.35% to 7,549.94, its best day since April 8

– Nasdaq 100 +3.40%

– All 11 sectors rose, and 418 S&P stocks rose against 80 that fell

– The VIX fell 22% to 19.92, its first close under 20 since the selloff began

• Nvidia's suppliers and rivals rose: AMD +9.22%, TSMC +6.5%, SK Hynix +4.7%

That last point is the key one. If investors were worried about AI chip demand, TSMC and SK Hynix would have fallen with Nvidia. Instead they rose. This is a discount on Nvidia's leadership, not on chip demand.

What's driving it

• Sunday: Huang emailed staff admitting he was unfaithful to his wife. Nvidia's board opened an independent investigation, led by independent directors with outside counsel.

• The board says it "has no reason to believe that either national security or NVIDIA secrets were compromised."

• Huang supports the review and stays on as CEO. He owns about 3.6% of Nvidia.

• Dan Ives called it a "black eye moment" for Huang.

• Earnings are Nov 17. Three House committee chairs have asked him to a closed-door briefing on Nov 18. That's two big events on back-to-back days.

Is this the bottom?

It is cheaper:

• Forward P/E ~20, PEG ~0.4

• Q3 guidance is unchanged at $108B ±2%

• Peers rallied the same day, so the business story hasn't changed

But the bottom isn't proven:

• $178.67 is 12.7% below the 200-day ($204.67) and 26.6% below the 52-week high ($243.37)

• The board investigation has no end date

• The 52-week low ($164.27) is 8.1% below. That's the first real support if the investigation drags on.

Buying the bottom during an open investigation into the CEO is guessing. Selling a put 16% lower, once the events are behind us, is pricing.

Checking it against my rules

❌ Trend: 12.7% below the 200-day. My first rule fails.

❌ Earnings: Nov 17 falls inside the Dec 18 expiry. I don't sell before earnings.

⚠️ Investigation: open, with no timeline

The strike resets

On Sunday my line was $160. After Monday's $8 drop, $160 is only 10.4% below the price, with delta 0.23. That's too close, so I move down.

Dec 18, 38 days, at about 55% IV:

• 1 standard deviation down ≈ $147

• $145 has delta 0.10, too far out to be worth selling

• $150 has delta 0.14, model premium ≈ $2.37, break-even ≈ $147.6

• $150 is 16% below Monday's close and 8.7% below the 52-week low

When I'll actually sell it

1. Earnings (Nov 17) and the House briefing (Nov 18) are behind us

2. Nothing new and negative from the board investigation

3. A daily close back above the 200-day

Then I re-price the strike at that day's IV and size it as Tier 1: 5% of the account, stop at 2× the credit, take profit at 50%.

Want chip exposure right now? AMD passed my rules this week; NVDA hasn't yet. The strike moves with the price. My rules don't.

Personal framework, education only, not advice. The premium is a Black-Scholes estimate, not a live quote. Allegations reported in the media are unproven. Options carry risk, including assignment.

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