NVIDIA (NAS:NVDA) closed 0.71% higher at $196.93 on local time as call option volumes surged past 1.5 million contracts, more than double the 690,000 put option contracts traded, according to CNBC and TD Ameritrade's ThinkorSwim data. The gain contrasted sharply with a 4.65% decline in the Philadelphia Semiconductor Index, where every constituent except NVIDIA fell. Market participants attributed the sector-wide weakness to concerns over global memory chip demand following Samsung Electronics' sharp drop the previous day, while NVIDIA attracted bullish positioning despite trading approximately 17% below its May all-time high.
NVIDIA Gains as Philadelphia Semiconductor Index Falls 4.65%
The Philadelphia Semiconductor Index dropped 4.65% with all constituents except NVIDIA declining. TSMC, Micron, and ASML fell approximately 5%, while AMD declined 6.88% and Intel plunged 10.26%. Market observers interpreted the sector-wide decline as a reaction to Samsung Electronics' sharp drop the previous day, which heightened concerns about a slowdown in the global memory chip sector and dampened investor sentiment across semiconductor stocks.
NVIDIA's relative outperformance came despite the stock trading approximately 17% below its all-time high recorded in May and showing only a 4% gain year-to-date. Market attention had recently shifted toward memory manufacturers and other AI-beneficiary stocks, moderating NVIDIA's upward momentum, yet option market activity indicated sustained bullish positioning for a short-term rebound.
Call Option Volume Exceeds 1.5 Million Contracts
TD Ameritrade's ThinkorSwim data showed NVIDIA call option volume exceeded 1.5 million contracts while put option volume reached approximately 690,000 contracts. Actual purchase volumes also reflected bullish sentiment, with call option buying more than double put option buying.
Similar bullish positioning appeared the previous day, when call option volume was more than twice put option volume. Approximately two-thirds of the roughly $600 million in option premiums traded concentrated in call options. Actual buying activity showed call purchases at approximately three times the level of put purchases.
One transaction attributed to a single investor involved the purchase of approximately $3.5 million worth of July-end expiration $200 strike call options. The option price per contract was approximately $7, and analysis indicated the stock would need to rise approximately 5.5% above current levels by expiration to exceed the breakeven point.
Short-Term $200 Strike Calls Dominate Trading Activity
SpotGamma data revealed that the top five most-traded option contracts were all short-term call options. The most actively traded product was the $200 strike short-term call option, with approximately 170,000 contracts traded and option premiums totaling approximately $11 million.
FAQ
What was NVIDIA's stock performance on local time compared to the semiconductor sector?
NVIDIA closed 0.71% higher at $196.93 on local time, while the Philadelphia Semiconductor Index fell 4.65% with all constituents except NVIDIA declining.
How did call option activity compare to put option activity for NVIDIA?
Call option volume exceeded 1.5 million contracts compared to approximately 690,000 put option contracts, with actual call buying more than double put buying according to TD Ameritrade's ThinkorSwim data.
