Mystery Trader Shorted NVIDIA in Advance, Netting Approximately $196 Million in Profit
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An options spread costing about $8.32 million was opened before Jensen Huang's departure became public, and has since ballooned to a ~$196 million paper gain — roughly 24× the initial outlay — raising immediate insider-trading concerns.
How did this trade actually make money?
The trader bought 180,000 put contracts at a $150 strike and sold 280,000 puts at a $100 strike, forming a put spread — a bet that pays off if the stock falls into a specific range — for a net cost of about $8.32 million.
On the day the position was opened, Nvidia traded around $226. Both strikes were deep out-of-the-money — meaning the market considered a drop that far almost impossible.
In plain terms = someone spent $8.32 million betting on an event nearly everyone dismissed, and that event is now unfolding.
How much has it made — and how much more could it make?
Nvidia sat at roughly $166 at the time of reporting, squarely inside the spread's maximum-profit zone. Paper gains stand at about $196 million — roughly 24× the initial stake.
Macro Risk Advisors analyst Joseph Niles estimates the spread is profitable as long as Nvidia stays between $11.46 and $150.46 before the January 15 expiry. If the stock drifts closer to $150, the theoretical ceiling rises to about $892 million.
The position's daily theta decay — the time value the options lose each day just by existing — runs at roughly $880,000, giving the holder a clear motive to close early and lock in profits.
Why is the market screaming "insider trading"?
The position was opened on October 12, before Huang's departure became public knowledge. This means → the trader was betting on a steep Nvidia decline before the catalyst was widely known — a timeline that is, at minimum, highly sensitive.
The spread's net notional delta — a rough measure of how much stock-equivalent exposure the position carries — has swollen from about $90.6 million at inception to nearly $1 billion, magnifying scrutiny.
This reflects the core regulatory question: the timing gap between the trade and the inside information. If an investigation confirms insider trading, the trust crisis around Nvidia's leadership deepens further.
Where do Nvidia and the broader chip sector stand now?
Nvidia's stock fell roughly 11% for the week and about 19% for the month. A modest ~2.5% pre-market bounce on Friday drew dip-buying interest, but overall sentiment remains cautious.
AMD and Broadcom both slipped about 2% pre-market after leading the S&P 500 higher on Thursday. This means → selling pressure extends beyond Nvidia; the entire semiconductor sector is cooling.
Microsoft dropped over 2% pre-market after Outlook, Teams, and its Copilot AI assistant suffered a major outage across more than 70 countries, adding to broader tech-sector pressure.
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