To The Moon

$NVIDIA(NVDA)$

"Same as before, just at a different time."

Last Monday, NVIDIA opened higher and rallied, with institutions aggressively selling $110 puts to collect premiums. Yesterday, another Monday, institutions continued the same play, selling this week’s $115 puts:

• $NVDA 20250328 115.0 PUT$ 

• Open Interest: 39,500 contracts.

In theory, simply following this trade works fine. For those concerned about a pullback today, you could opt for next week’s expiration instead.

For the more cautious traders, you can continue selling $110 puts. Each week, this could net you about $50 per contract until April 17—or alternatively, you could directly sell:

• $NVDA 20250417 110.0 PUT$ , which offers a total premium of $128.

• Annualized Return: 17.8%.

For the bold, a longer-term approach may be worth considering.

Open Interest Trends and Price Targets

There’s been a temporary issue with reporting open interest data, but here’s the current picture:

• The top bullish open interest for NVIDIA is on April $130 calls, with 116,000 contracts outstanding.

• This indicates a high probability of NVIDIA steadily moving toward this target in April.

For those willing to take on more risk, you could raise your strike price for selling puts. If you get assigned, simply roll the position forward by one week, as the overall trend remains upward.

Tuesday’s Notable Trades

Two large trades were opened on Tuesday:

1. Cost-Free Bullish Strategy:
   This strategy combines a sell put and a buy call, effectively betting on a rise without spending any capital upfront. However, the presence of this strategy suggests that the potential upside may be limited.

   • Sell: $NVDA 20250620 110.0 PUT$ 

   • Buy: $NVDA 20250620 140.0 CALL$ 

   

2. Limited Bullish Strategy:
   This trade involves buying and selling calls with the same expiration, limiting the potential upside. It’s similar to investor Duan Yongping’s approach, but the latter’s strategies tend to offer better value. Institutions have set a similar target price here:

   • Buy: $NVDA 20260618 115.0 CALL$ 

   • Sell: $NVDA 20260618 145.0 CALL$ 

Key Takeaway

Based on current open interest and trades, April remains a seller’s market. Selling puts appears to be the most conservative and profitable strategy for now.

$Tesla Motors(TSLA)$

Tesla’s recent price surge has reignited bearish sentiment, with Monday’s options activity dominated by bearish positions. However, if Tesla’s stock continues to rise, this could lead to a short squeeze and further upward momentum.

Bearish Activity: Rolling Call Spreads

Most bullish option orders on Monday were sell calls, primarily placed by institutions. Tesla’s rally pushed the stock price beyond their hedged levels, forcing them to roll their positions:

• Previous Position:

  • Sell: $TSLA 20250328 250.0 CALL$ 

  • Buy: $TSLA 20250328 270.0 CALL$ 

• New Rolled Position:

  • Sell: $TSLA 20250328 285.0 CALL$ 

  • Buy: $TSLA 20250328 310.0 CALL$ 

It’s important to note that institutions did not roll to next week’s expiration. They kept the expiration at this week, indicating significant pressure if prices continue to rise.

On Monday, the stock price hovered below $282.50, but by Tuesday’s pre-market, Tesla had climbed to $283. It remains to be seen if institutions will roll again.

Bearish Put Activity

The top newly opened bearish positions were as follows:

1. $TSLA 20250328 240.0 PUT$  (expiring this week)

   • Open Interest: 30,000 contracts.

2. Next Week’s $100 Put.

3. $TSLA 20250328 250.0 PUT$ :

   • Open Interest: 15,000 contracts.

4. $TSLA 20250328 260.0 PUT$ :

   • Open Interest: 14,000 contracts.

For these put positions, the direction was split evenly between buy and sell orders. However, it is unlikely for Tesla to drop below $240 this week.