Alex Dudov
Nvidia (NVDA) kicked off today's session on shaky ground, tumbling more than 3% in the opening hour. Early options data reveals a sharp tilt toward bearish sentiment, marking a stark shift from the stock's recent momentum. The combination of quick price deterioration and negative premium flow points to institutional traders taking a defensive stance right out of the gate.
Price Action and Options Data Show Growing Caution
The stock fell from around $190 down to $187 within minutes of the opening bell, reflecting intense selling pressure that set a downbeat tone for the entire session. Options flow data shows net put premium diving to nearly –$20 million early on, indicating strong demand for downside protection or outright bearish bets. This sustained negative pressure throughout the morning suggests traders expect further weakness.
Call activity remained muted, with the net-call line trending lower. The absence of upside positioning reinforces that few traders anticipate a quick recovery. Despite a brief mid-morning bounce attempt, the stock couldn't push back above the $189.50–$190 zone, which now appears to be acting as near-term resistance.
What's Behind the Selloff?
No single catalyst explains today's drop, but several factors are likely at play. Profit-taking after Nvidia's extended rally seems natural at this stage. Broader volatility in tech and semiconductor stocks hasn't helped either. Macro headwinds like interest rate uncertainty and geopolitical tensions continue to weigh on sentiment. There's also been some sector rotation, with money flowing temporarily into defensive plays. All these elements can amplify derivatives-driven moves, making today's negative options flow particularly telling.
What Comes Next?
Nvidia's long-term fundamentals in AI and high-performance computing remain rock-solid. But right now, the alignment of falling prices and bearish options positioning suggests more choppiness ahead in the near term.
Key things to watch:
- Can the stock reclaim $190 and hold it?
- Will options flow stabilize or turn positive?
- Will institutional buyers step back in on the call side?
If the negative flow continues, lower support levels could come into play. But if sentiment shifts, momentum could return quickly. For now, the market's sending a clear message: traders are playing it safe, and Nvidia's navigating a short-term confidence dip despite its strong long-term outlook.
Alex Dudov
