To The Moon

$Cboe Volatility Index(VIX)$

Let’s start by discussing the large option trades on the volatility index, VIX. The upcoming market conditions could be mentally taxing, and looking at the VIX is a more intuitive way to gauge it.

The current market seems to have bottomed out but hasn’t fully hit the bottom yet. What people fear is not bottom-fishing, but the long process of consolidation. After patience is exhausted, the market could dip again, scattering retail investors, only to rally afterward, completing the "retail investor cleaning plan."

A typical example is the performance of Chinese stocks in January.

Specifically, institutions recently rolled their bullish VIX spreads. The sell call lower limit was raised from 30 to 35, while the buy call upper limit was increased from 60 to 75.

There are two large trades like this, expiring in mid-April and mid-May, respectively. This suggests that the market may remain unstable until mid-May.

• Sold $VIX 20250416 35.0 CALL$ , with a volume of 99,600 contracts.

• Bought $VIX 20250416 75.0 CALL$ , with a volume of 99,600 contracts.

  

• Sold $VIX 20250521 35.0 CALL$ , with a volume of 49,800 contracts.

• Bought $VIX 20250521 75.0 CALL$ , with a volume of 49,800 contracts.

  

At the same time, as the VIX bullish ceiling is raised, the average VIX level is also increasing. On the 10th, someone placed a large butterfly spread, indicating that they believe the VIX is likely to be between 17 and 23 by mid-May, with a median of 20:

• Bought $VIX 20250521 17.0 PUT$ 

• Sold $VIX 20250521 20.0 PUT$ 

• Bought $VIX 20250521 23.0 PUT$ 

  

There are many reasons why VIX prices may not drop, such as:

1. A sharp plunge like in August 2024.

2. The market not rebounding above support levels for an extended period, like from September to December 2018.

3. Large S-shaped swings back and forth.

Regardless of the scenario, none of these outcomes are good news for those who have recently bottom-fished in the market. It’s essential to be mentally prepared for this. Be cautious with leverage, and avoid buying short-term out-of-the-money calls, as time decay will be significant.

Even the $2 billion long-term bullish trade on $YINN 20260116 27.0 CALL$  couldn’t withstand market corrections, let alone the average investor.

$NVIDIA(NVDA)$

On Monday, institutions continued to roll their sell call positions, with this week’s ceiling expected to be below $114. New open interest in call options outpaced that of put options, with a reasonable lower limit above $110. Ideally, next week the price would return to around $120 to eliminate the largest concentration of open interest.

A major bearish trade recently emerged:

• $NVDA 20251121 105.0 PUT$ , with 12,000 contracts opened and a transaction value of $18.16 million.

On the same day, a major bullish spread trade was placed:

• Bought $NVDA 20260320 115.0 CALL$  with a transaction value of $10.95 million.

• Sold $NVDA 20260320 140.0 CALL$  with a transaction value of $6.95 million.

If you’re looking to take an aggressive bullish position, you can refer to this trade. While this strategy implies the trader isn’t confident about a high rebound in the first half of the year, it also ensures that they won’t lose money if prices don’t rise:

• Sold $NVDA 20250620 85.0 PUT$ 

• Bought $NVDA 20260620 150.0 CALL$