Bullish sentiment surges! As the semiconductor sector plummets, NVIDIA receives significant options betting
As the semiconductor sector faces pressure, NVIDIA demonstrates resilience, with its stock price rising by 0.71%. Despite rumors of delays for the next-generation servers, the company has denied them, and market sentiment has not worsened. Options data shows that investors are highly bullish on NVIDIA, with call option trading volume far exceeding put options, contrasting sharply with the defensive trading in semiconductor ETFs, indicating that funds remain optimistic about NVIDIA's future
According to the Zhitong Finance APP, while the semiconductor sector is under overall pressure, AI chip leader NVIDIA (NVDA.US) has shown strong resilience. Despite the VanEck Semiconductor ETF (SMH.US), which tracks the semiconductor sector, dropping about 5% on Tuesday, NVIDIA's stock price still managed to turn positive, indicating that investors remain optimistic about its future. By the close, NVIDIA's stock rose 0.71% to $196.93.
The day before, research firm SemiAnalysis released a report stating that NVIDIA's next-generation Kyber AI server rack production is at least a year behind schedule compared to the original plan. However, NVIDIA subsequently denied the related reports, and market sentiment did not deteriorate significantly as a result.
Currently, NVIDIA's stock price hovers around $200 per share, having fallen about 17% since reaching an all-time high in May, with a year-to-date increase of about 4%. Meanwhile, as AI investment themes spread, market funds have recently flowed more into niche areas such as memory chips.
However, from the options market perspective, investors' bullish sentiment towards NVIDIA remains significantly stronger than that of the entire semiconductor sector.
ThinkorSwim data shows that on Tuesday, the trading volume of NVIDIA options exceeded 2.2 million contracts, with over 1.5 million contracts being call options, while put options were less than 690,000 contracts; in terms of active buying, the number of call options purchased was also more than twice that of put options.
In contrast, the options trading for the SMH ETF clearly leaned towards defense. Data shows that investors bought about 33,000 put options, while only about 7,300 call options were purchased, with the scale of put option purchases approaching four times that of call options, reflecting a cautious attitude towards the entire semiconductor sector.
In fact, this phenomenon had already appeared since Monday. After NVIDIA responded to rumors about the delay of the Kyber servers, the company's options market trading significantly favored bullish positions. On that day, the trading volume of call options was more than twice that of put options, with nearly two-thirds of the approximately $600 million in options premiums flowing into call options.
Notably, a large transaction also occurred in the market. An investor reportedly invested about $3.5 million to buy call options expiring at the end of July with a strike price of $200. Based on the transaction price, NVIDIA's stock price would need to rise about 5.5% from the time of purchase for this transaction to break even.
As of now, the five most actively traded options contracts in the market are all near-expiration call options. Among them, the call option with a strike price of $200 is the most popular, with a daily trading volume of nearly 170,000 contracts, corresponding to a premium of about $11 million.
Analysts believe that against the backdrop of an overall pullback in the semiconductor sector, the continuous influx of bullish funds in the NVIDIA options market reflects that some investors still bet on the company's stock price to potentially rise above the $200 mark again and initiate a new round of upward momentum
