Option Focus | NVIDIA’s $4.51 Million Bearish Call Spread and $2.95 Million Long Put Reveal Institutional Skepticism as Bearish Flow Tops Bullish by $21.35 Million

Option Witch
Aug 20

NVIDIA Corporation closed at USD 217.56, down 0.99 percent.

Large options activity leaned decisively bearish, with the biggest block a $4.51 million net-credit bearish call spread and another a $2.95 million outright long put. Institutional flow totaled $28.36 million bearish versus $7.02 million bullish, a net bearish gap of $21.35 million, signaling that large traders are positioning for capped upside or meaningful downside rather than chasing further strength in NVDA shares.

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Options Indicators

NVDA’s implied volatility stands at 43.21%, with an IV percentile of 45.42% and an IV/HV ratio of 1.12. Taken together, this suggests current option pricing is in a neutral volatility regime rather than at an extreme: implied volatility is moderately above historical volatility, but the percentile indicates options are neither especially cheap nor especially expensive relative to their own recent range.

The Call/Put volume ratio is 1.68.

Large Trades

A bearish call spread with a $4.51 million net credit was the largest displayed trade, built by selling 5,000 Oct. 16, 2026 $220 calls and buying 5,000 Oct. 16, 2026 $250 calls. With NVDA referenced at $217.56, both call strikes were out of the money, and the structure reflects a classic premium-collection bearish stance: the trader is effectively capping upside exposure with the long $250 call while monetizing the expectation that shares stay below the short $220 strike or at least fail to rally aggressively through that zone by expiration. The use of a net credit spread points to a defined-risk bearish view rather than an outright naked call sale, suggesting the seller wants to express skepticism on upside while keeping risk controlled.

A PUT buy worth $2.95 million was the other highlighted trade, consisting of 1,500 contracts of the June 17, 2027 $200 put purchased outright. Since the $200 strike sits below the $217.56 reference price, the option was out of the money at execution, making this a straightforward bearish directional bet with longer-dated tenor. Buying this put gives the trader leveraged downside exposure while limiting risk to the premium paid, and the long maturity suggests concern about a meaningful pullback over an extended horizon rather than a very short-term hedge around immediate volatility.

Overall large-trade sentiment is clearly bearish, with $28.36 million in bearish flow versus $7.02 million in bullish flow, leaving a net bearish gap of $21.35 million. The conclusion from the block activity is that institutional-sized traders were leaning against further upside and positioning for downside or capped gains, as shown by the dominance of bearish spreads, put purchases, and premium-collecting bearish call structures. Even where risk was defined, the repeated use of bearish combinations indicates a market tone that is not pricing in confidence for sustained upside follow-through in NVDA.

Strategy Reference

For a low assignment probability on the call side, a seller could consider the Oct. 16, 2026 $250 call, which is far enough above spot and already used as a hedge leg in the largest bearish spread; for a defined-risk alternative without posting excessive margin, a bear call spread such as short $220 call / long $250 call mirrors the institutional positioning while capping loss potential.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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