Bulls Bet Big on Nvidia Stock Prior to China Investigation

The Chinese government is investigating Nvidia for a possible antimonopoly law violation

Chip stock Nvidia Corp Inc (NASDAQ:NVDA) is down 2.6% at $138.58 at last glance, following news that China is investigating the company for a possible antimonopoly law violation. The Chinese government will look over the acquisition of Israeli tech concern Mellanox back in 2020, as well as agreements that happened during the transaction.

Pressure at the $150 level last week stopped NVDA from conquering its Nov. 21, record high of $152.89. Despite today being on track for a third-straight loss, long-term support at the 60-day moving average looks ready to act as a floor. So far this year, Nvidia stock added 180.6%.

NVDA 60 Day

NVDA led Senior Quantitative Analyst Rocky White’s list of stocks that attracted the most options volume in the past two weeks, with 35,089,670 calls and 18,338,888 puts traded. The most active contract by far within that period was the weekly 12/6 145-strike call. 

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Calls are outpacing puts longer term, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Nvidia stock’s 50-day call/put volume ratio of 2.26 ranks higher than all other readings from the past year.

It’s worth noting that the stock’s elevated Schaeffer’s Volatility Scorecard (SVS) of 81 out of 100 implies a tendency to outperform volatility expectations — a boon for premium players.

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