Nvidia Trader Uses Cheap Options to Bet the Record Run Fades

$NVIDIA(NVDA)$   options are near their cheapest levels of the past year, and on Friday morning a trader spent $7.88 million opening in-the-money January put options — using bargain pricing to bet that the stock's record run could fade rather than hold.

The timing followed a rough Thursday for artificial-intelligence stocks. Nvidia shares fell 2.94% on Thursday after the Financial Times reported that OpenAI had told investors its annualized revenue was nearing $50 billion, about $20 billion below a figure previously reported. If a central chip buyer is generating less revenue than assumed, the spending behind its orders gets harder to trust.

Exchange data tracked showed the confirmed new trade at 09:44 on Friday, when 3,460 put options contracts expiring on Jan. 15, 2027 with a strike price of $245 changed hands on the ask, costing the buyer $7.88 million in premium. A put option gives the buyer the right to sell shares at a set price, and paying the ask signals urgency. 

With the stock near $231, the $245 strike was already in the money, and the position breaks even near $222.21, so the trader needs only about a 4% fall to be paid.

The block trade, labeled as bearish, came a day after its contract manufacturer $Taiwan Semiconductor Manufacturing(TSM)$   Manufacturing reported a NT$1.49 trillion, up 51% from a year earlier, with September sales up 54.6%. TSMC builds Nvidia's advanced chips, so those figures show processors already billed, a firmer signal than spending pledges.

The bargain sits in the volatility numbers, which show how big a swing option prices expect. Exchange data tracked put implied volatility at 33.64%, above historical volatility of 25.43%, so options cost more than the stock's recent swings would justify. Against Nvidia's own past year, though, that reading sat at the 2nd percentile, among the cheapest days in the window.

A far larger January print crossed Friday morning and says less than it appears to. Exchange data tracked showed 100,000 contracts of $180 put options also expiring on Jan. 15, 2027 traded on the ask, for $21 million, with no open tag attached. Without that tag, the data cannot show whether the trader opened a new position, closed an old one, or rolled protection elsewhere, so the morning's biggest print cannot be counted as fresh bearish money.

Beyond Friday, the volatility curve did not price panic. Data showed implied volatility near 39% for Friday's expiry, dropping to about 21% for the next dates before climbing back up toward 40% years out, while same-day deep out-of-the-money puts carried implied volatility above 1,000%. Those same-day figures are lottery prices for a crash before the close, not a forecast for next week.

The wider outlook priced a range, not a direction, and Friday's positioning could still pin the stock. Exchange data tracked  gave the Jan 15, 2027 expiry a 28.49% chance of closing above $253.85 and 28.05% below $207.702, near-equal tails that expect a bigger move without settling on which way. For Friday it showed a put wall at $230, which can act as a floor, a call wall at $232.50, which can cap gains, and a gamma flip near $231.43, where dealer hedging can amplify moves.

Other news earlier in the week gave both sides material. $Microsoft (MSFT.US)$ and Nvidia unveiled the Surface Laptop Ultra running Nvidia RTX Spark chips for artificial-intelligence agents on personal computers. Another news report stated that SpaceX is seeking $40 billion, led by Apollo Global Management, to buy Nvidia chips. One story widens Nvidia's market, and the other shows how much borrowed money stands behind chip demand, the point Thursday's OpenAI report made investors nervous about.

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