Option Focus | NVIDIA’s $190 Million Synthetic Put and $12.16 Million Put Sale Reveal Bearish Institutional Flow Despite Cheap Options

Option Witch
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NVIDIA closed at $228.38, up 0.51%, after opening at $229.27 and fluctuating between $228.17 and $232.37 on trading volume of approximately 122 million shares.

Large options activity showed a distinctly cautious stance despite relatively cheap volatility. The session featured a $1.90 million synthetic put and a $12.16 million put sale, alongside elevated call volume on the surface. Below the headline call/put ratio, block trades leaned bearish, with traders positioning for long-dated downside or collecting premium while accepting potential assignment.

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Options Indicators

NVIDIA’s implied volatility is 38.63%, and with an IV percentile of 16.33%, current option volatility sits on the low side relative to its own recent history, indicating that options are cheaply priced rather than expensive. The IV/HV ratio of 1.42 also suggests implied volatility is running above realized volatility, so the market is still assigning a premium for future movement, but within a broader context where overall option pricing remains relatively inexpensive.

The Call/Put volume ratio is 1.91.

Large Trades

A synthetic put position with a net debit of $1.90 million was one of the standout large trades, built through buying the January 21, 2028 $180.00 put and selling the January 21, 2028 $400.00 call, both for 3,300 contracts. With NVDA referenced at $228.38, both legs were out of the money at execution, and the structure expresses a clearly bearish long-dated view. By pairing a long put with a short call, the trader is effectively replicating short stock exposure over the long horizon, signaling expectations for downside or a desire to hedge against a material decline in the shares.

A put sale worth $12.16 million was the other key displayed block, involving the sale of 4,400 contracts of the December 17, 2027 $220.00 put. With the stock at $228.38, this strike was out of the money, making the trade moderately bullish in tone: the seller is betting NVDA can remain above $220.00 into expiration and is willing to take assignment near that level in exchange for premium income. Strategically, this type of trade often reflects confidence in the underlying holding up over time, with the seller using the put premium to express a buy-the-dip stance rather than an outright upside chase.

Overall, the large-trade flow leans bearish. Even though the biggest displayed single-leg trade was an out-of-the-money put sale that showed willingness to own weakness, the broader block activity was dominated by downside-oriented positioning, including the long-dated synthetic put and multiple other bearish structures and put purchases in the full tape. Taken together, the institutional flow suggests caution toward NVDA’s forward path, with traders showing more interest in hedging or positioning for downside than in pressing an aggressive bullish breakout view.

Strategy Reference

For a premium-selling approach with lower assignment probability, a trader could consider selling out-of-the-money puts below $200.00 given the elevated put-side skew; alternatively, a bear put spread using nearer-dated strikes may define risk while still benefiting from the cautious large-flow backdrop.

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