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Trader expects big move in Nvidia

Chris McKhann (chris.mckhann@optionmonster.com)

A large trader is looking for a big move higher or lower in Nvidia.

optionMONSTER systems show that a trader bought 5,000 December 12 puts in one print for $0.31. This is clearly a new position, as the volume was far above the strike's open interest of just 826 contracts before the trade appeared.

About a minute later, a block of 80,000 shares of NVDA was bought for $14.6687. The combination of stock and options creates an overall position that is delta-neutral and long volatility . That means that the trader is looking for a big move up or down and/or volatility that is greater than that implied by the options premium. (See our Education section)

NVDA is up fractionally to $14.63. The graphics-chip maker closed at $14.92 on May 22 and has been trading between $14 and $15 since early that month.

More than 8,600 NVDA options have change hands today, compared to a daily average of 4,355 contracts.

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