Huida stock price fell below the buying point? A mysterious big player appears in the options market, betting on a counterattack in stock prices

The latest trading activity shows that some investors are betting heavily on Huida's call options. (European News Agency)

[Financial Channel/Comprehensive Report] Nvidia CEO Jen-Hsun Huang was recently revealed by foreign media to have an affair with Huang Le (also known as Alice Huang), a woman suspected of being a Chinese spy. In addition to Nvidia's board of directors launching an investigation, three U.S. House of Representatives committee chairmen also asked Jen-Hsun Huang to attend a face-to-face closed-door joint briefing, causing Nvidia's stock price to fall recently. However, the latest trading activity shows that some investors are betting heavily on Huida's call options, indicating that the market is thinking that now is an opportunity to buy Huida at bargain prices.

"CNBC" reported that Huida's largest option trade on Monday involved more than $100 million in option premiums. Traders converted the original call spread position into a more bullish position, betting on Huida's stock price trend in the next five months.

The core of this transaction is the purchase of 52,000 call options with a strike price of US$195 and expiration on February 19, 2027, worth approximately US$57 million. The trader used this to establish a new buying position and at the same time sell the same number of call options with a strike price of $245 and also expiring on that date, thereby reducing transaction costs by $10 million.

The net position created by this trade is a call spread strategy. To profit, Huida's stock price must rise above approximately $206 before expiration, an increase of approximately 15%. If Huida's stock price touches the sell strike price of $245, it means that the stock price will surge by nearly 40% and return to the record high of $243 set on October 6.

According to SpotGamma's analysis, this transaction may be an operation to close the call spread position originally worth approximately US$42 million with strike prices of US$210 and US$255, and then adjust the strike price downwards.

Brent Kochuba, founder of SpotGamma, said: "Traders adjust this spread position downward to a lower strike price and adopt a more aggressive strategy to increase exposure to rising market prices." Kochuba added: "Due to the high volatility before the earnings report, option prices are quite expensive, so traders use a call spread strategy here. This transaction significantly increases the delta exposure to rising stock prices."

Delta is a term in option trading, used to describe how quickly the option price will react when the underlying stock price changes. After the trader adjusts the position to a lower strike price, if Huida's stock price rises, the profit will be faster.

In other words, it's a more confident bet that Huida's stock price will rebound soon.

According to SpotGamma data, the trader bought a call option with a strike price of $195 for $57 million, which was the largest single option trade on the market on Monday. Data shows that 12 of the top 20 option transactions ranked by transaction value are related to Huida.

As of midday Monday, option money flow on Huida stock was overall bullish. SpotGamma data shows that 57% of option trading volume is related to calls, and the total premium for call positions actively established by call option buyers may exceed US$660 million.