Large bullish options appear in the market and bet on Nvidia's stock price to surge by 16% in two weeks.

Some single transactions highlight strong bullish sentiment in the market, betting on Nvidia's performance to exceed expectations again. Chris Murphy, co-head of derivatives strategy at market maker Susquehanna, revealed that a large transaction occurred on Monday: the trader bought 25,000 June 1st call spread options for $1.78 each, betting on Nvidia's stock price to rise by approximately 16% in the next two weeks and reach $260 per share. The potential profit from this transaction could be more than 7 times the initial investment. Murphy stated that the options position for Nvidia is now biased towards call options, indicating a continuing increase in bullish market positioning. "The market is no longer just buying options to hedge against downside risk, but is increasingly actively positioning for potential upside gains," he said. He also mentioned that bullish bets on US tech stocks have risen from a five-year low in March to a five-year high in mid-May. While traders are generally bullish on Nvidia, there has been an increase in hedging and profit-taking behavior in semiconductor stocks and related ETF markets, even the most optimistic investors are now focusing on protecting their profits after significant gains in the sector. Murphy noted that investors will closely watch Nvidia's financial report to confirm the recent upward trend in AI and chip stocks prices and volatility, particularly focusing on data center demand, capital expenditure trends for tech giants, corporate profit margins, and future performance guidance, all of which are key elements supporting the continued uptrend in the AI market. He added, "It's important to note that the semiconductor sector is now where most of the capital is flowing. Options market signals show that funds are still willing to continue betting on Nvidia's stock, but they are also starting to hedge risks and secure gains on other popular high-flying assets."