The first two trades (11,400 $80-strike AMD puts and 12,000 NVDA 165-strike puts) were
just two minutes apartand featured similar contract quantities — meaning it was extremely likely that this was the same trader making both of these moves.
AMD’s $80 strike positions cost the bearish trader $5.23 million and those NVDA positions (which only expire one week after the purchase) cost the buyer $2.14 million. Combined, these two option markets represented 23,400 contracts — all OTM. But the merchant wasn’t done. They returned just four days later—just a day and a half before the news broke—and spent
another $1.57 million AMD is screwing you for nothing, just this once three days until expiration. In total, those three purchases totaled $8.94 million — 38,400 short-dated, out-of-the-money contracts.
How these three bearish UOA trades performed
In third place: The December AMD trade. 11,400 puts (originally bought for $5.23 million, an average of $4.58 per contract), are now worth $9.50 per contract — a total of $10.83 million, more than double the original trade price.
In second place: The AMD trade on August 30, three days to expiration. 15,000 puts (originally bought for $1.57 million, $1.05 average per contract), now worth $6.35 per contract — a total of $9.53 million, more than six times the original trade price.
In the first place: The weekly trading of NVIDIA put on August 26. 12,000 put options (originally bought for $2.14 million, an average of $1.78 per contract), are now worth a whopping $30.40 per contract — a total of $36.48 million,
more than seventeen times the initial transaction price.
The bottom line
There is blood in the streets right now. Many investors are running scared, or simply outsmarted by market upheavals. But some institutional traders, like him, have managed to stay one step ahead. Through the power of put options, they found a way to profit from the pain of the stock market.
If this institutional trader saw the same bearish technical forecast that CMT AJ Monte saw on NVIDIA, or
something they knew before the press release, does not matter. What matters is that the trade worked – and it’s another great example of why individual traders should consider trading unusual options activity.