Who is the Nvidia Whale? ($1 Billion Dollar Options Trade)

Who is the Nvidia Whale? ($1 Billion Dollar Options Trade)

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Sometimes when we see massive dips and spiking VIX, we spot unusual options activity that is extremely bearish — traders slamming the buy button on puts in an effort to cash in on further downside. However today, across the board buyers were stepping in to buy the dip using options — and no “dip-buy” was larger than that of the Nvidia whale. That’s what Market Rebellion Co-Founder and pioneer of unusual options activity, Jon Najarian, visited Fox Business today to talk about. As he talked to “Making Money” host Charles Payne, he asked an important question:

WHO IS THE NVIDIA WHALE?

Nvidia was largely to blame for today’s red market action. On the final day of what has been a 10-week rally, with a weekly RSI of over 89, Nvidia fell more than 4% — its worst day since October 2022. This came amid widespread rumors that an Nvidia stock split is imminent.

However, rather than running for the hills along with many other investors and traders, a trader we’re calling the Nvidia whale stepped in with a truly titanic trade:

A purchase of roughly $1 billion dollars worth of June-expiring $820 strike call options. This isn’t their first trade, either. Back in late February of 2023, this buyer bought 31,500 $720 strike calls expiring in May, worth about $300 million dollars at the time. This was a roll from that trade, which was a roll from a prior trade in the $680 strike before that! 

Here’s Jon’s take on this trade and the Nvidia whale:

“They’ve invested in over $1.4B worth of options – that’s a TON! These guys don’t just buy a 5 lot or a 10 lot, they buy 30k options at a crack – equivalent to 3 million shares. I’m thinking it’s one of the largest hedge funds on the street. I don’t know who it is, but I’ll tell you what… they’ve been right, right, and right. That’s why we like to follow them.” – Jon Najarian

They bought these earlier in the day — and it doesn’t look like the last half of this dip has scared them away from this trade based on option volume analysis.

But who could the Nvidia whale be?

One possibility is someone like Susquehanna International Group. This is one of the largest options trading firms in the world. As of their last 13-F filing, Susquehanna International held a position in Nvidia call options worth over $10 billion dollars. That was in December of 2023, meaning if they’re still holding those positions, they’re already looking at an astronomical gain. The fund also held a $1.58 billion dollar position in Nvidia shares — their second largest single stock position (the first being Microsoft). That said, Susquehanna also held a large amount of put options in Nvidia, which makes the case for Susquehanna somewhat more murky.

Another possibility is somebody like Blackrock. On their last 13-F filing, Blackrock held a monstrous $88 billion dollars worth of Nvidia shares, making them one of the absolute largest investors in this chip giant. That sizeable share count was owned alongside an additional $447 million dollars in Nvidia call options. The dollar amount associated with those options would measure up well with the size of the prior options trades we saw in this name leading up to this roll, since this 13-F filing also took place in December of 2023. At that time, Nvidia was Blackrock’s largest single-stock, non-ETF option holding.

But it doesn’t stop there: The possibilities are nearly endless. For instance, the list below shows five more funds with multi-billion dollar Nvidia call option positions:

  • Jane Street Group
  • Citadel Advisors
  • IMC-Chicago LLC
  • Simplex Trading LLC
  • Goldman Sachs

However, the catch with these five are that they, like Susquehanna, are also holding massive put positions.

Another possibility is a wealthy individual investor, someone like legendary investor Stanley Druckenmiller, with Duquesne Family Office. Last quarter, Druckenmiller took a position in Nvidia call options worth over $400 million dollars according to a recent 13-F filing.

So then is it an individual investor?

The real answer is we don’t know what powerful investor placed this trade. The question of who the Nvidia whale is will likely remain a mystery, and that’s okay. What’s important is that we know it’s there.

No matter who purchased this massive quantity of Nvidia call options, by tapping into the power of unusual options activity, we can harness this trade, and ride alongside it. We can even augment it, considering this trade is a very expensive open. For instance, one could go out to the June expiration, where these options were bought, and instead of getting a deep-in-the-money call, they could consider buying an at-the-money debit spread to limit their risk and lower the capital necessary to make the trade (in exchange for capping their potential gain).

What’s also important is that this was an options trade. By using options, this investor limited their risk in a high-flying stock while leaving room for uncapped potential gains in the event that this chip giant continues to push higher. They didn’t back down when Nvidia continued to fall, and that might be because they know that their risk in this stock-replacement style trade is significantly lower than if they were to seek the same leverage using shares, considering they would have needed to buy 3.7 million shares in order to gain the same control over the stock. That’s the power of options, and it’s why Jon and Pete Najarian called their new book It’s NOT an Option — because it’s not an option to only trade with shares. Using options allows traders to limit their risk gain leverage to the upside, as well as make nuanced trades on a variety of different price outcomes.

So instead of asking the question, “who is the Nvidia whale?” consider asking yourself,

Why did they make this trade?”

“What method did they choose to make this trade?”

How can I use the information in this trade to my advantage?”

It’s questions like those that will help you become a better-equipped, more skilled trader.

Want more unusual options activity insights like this one, complete with trade ideas crafted by professional options analysts and former floor traders? Check out Market Rebellion’s unusual options activity service below.

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