To The Moon

$Nvidia (NVDA)$ In fact, it's not just me following the big orders in the market. Other institutions are also watching and acting in line with their peers. When their peers sell, they sell too. Last week, I shared a large sell order for the $NVDA 20240426 950.0 CALL$  that was executed on April 1st. Today, upon checking the closing positions, I found that the 10,000 contract $NVDA 20240621 1200.0 CALL$  long position was also closed out later that day. Subsequently, on April 3rd, there was a large sell order for the $NVDA 20240621 1180.0 CALL$ .

So does this mean it's more suitable to sell calls on Nvidia now? No, the $NVDA 20240426 950.0 CALL$  was possibly bought back to close the position today, earlier than I previously expected. After all, earnings season is starting this Friday, so who knows if there might be an early rally. Meanwhile, our $200 million trader is still holding on to the $NVDA 20240621 880.0 CALL$  in-the-money position.

Last week, along with the 950 call sale, there was also a sale of the AMD $AMD 20240426 185.0 CALL$ , which unsurprisingly was also closed out today. I estimate it was the same institution executing these trades. Calculating it out, they went on a 5-day trip and came back to close the positions, likely netting around a 70% gain, or roughly 200% annualized. If I didn't have the underlying shares, there's no way I would dare sell naked calls on margin and then go off traveling - who knows if the position would be negative or positive 5 days later when reopening the app? However, adding a buy call leg to make it a spread strategy with defined risk would have been a decent trade.

The closing out of out-of-the-money call options and outright selling indicates institutions are taking a conservative view on the near-term semiconductor outlook. As long as they aren't selling at-the-money calls, I don't think there's a major issue, especially since the $200 million trader hasn't closed their position.

Moving on from the large orders, let me discuss this week's opening positions. Here's the bombshell conclusion: Nvidia will close this week above $870. After Nvidia's sluggish performance last week, put option opening activity has been very lively this week. The strikes with the most new put openings are: 870, 840, 850, 800, 825, 860, 865...basically covering everything below 870. For calls, the ranks are 950, 1000, 900, 910...much more scattered.

This put option positioning could easily trigger a cascading selloff, but the issue is that open interest isn't high enough, which is why it couldn't break below $870 today. Most likely, all these puts will get killed this week. So to sell puts, consider the $NVDA 20240412 860.0 PUT$  and $NVDA 20240412 850.0 PUT$ .

By the way, for Tesla, at-the-money call options were more actively traded this week, with the 172.5 strike ranking first. Put options have a more significant gap, with the 150 and 160 strikes having the highest open interest, so those will likely get killed this week as well. This is because the large sell order for the $TSLA 20240426 150.0 PUT$  next week suggests Tesla won't go below $150 before earnings, but it's hard to say how much upside there is. The large sell order for the $TSLA 20240412 182.5 CALL$  from last Thursday was closed out today. The reason could be that the 5% rally created some pressure for the sellers, or it could just have been a Thursday-to-Monday sell call trade, similar to my Friday sell put trades.