Nvidia and Intel Call Buyers Bet Big Despite Semiconductor Sell-Off

Semiconductor stocks are facing their largest drop since late March, with the VanEck Semiconductor ETF (SMH) down about 1% after an early Qualcomm rally fizzled out. Despite this dip, options traders are making significant bullish bets on key chipmakers Nvidia and Intel.

These aggressive call purchases signal confidence in further upside for these tech giants, even as the broader chip sector struggles. Nvidia recently hit a new all-time high, while Intel has doubled off its recent lows, attracting high-volume options activity.

Massive $2.2 Million Nvidia Call Purchase Sparks Optimism

One of the largest trades this morning was a $2.2 million purchase of 2,168 call options for Nvidia with a $210 strike price expiring May 15. These at-the-money contracts stand to benefit if Nvidia’s shares continue climbing beyond their recent peak of $212.65.

Calls are dominating Nvidia’s options market, outnumbering puts by more than two-to-one, and call premiums make up over 80% of the total options value traded. With Nvidia’s earnings report about a month away, volatility remains slightly cheaper than the broader semiconductor ETF, indicating traders expect potential price swings.

Intel Bulls Double Down After 100% Rally

Intel’s stock has surged 100% from last month’s lows, and call buyers are showing resilience. Call volumes and premiums are outpacing puts, reflecting bullish sentiment.

A notable trade involves a lopsided call spread where a trader sold 3,000 calls at a $60 strike expiring June 18 and used the proceeds to buy 10,000 calls at a $95 strike for the same expiry. This strategy profits if Intel’s stock rises significantly above $108 by expiration.

While the trade risks losses if Intel remains below $108, the value of the purchased calls could soar if volatility increases, a common pattern when retail investors rally behind a favored stock.

What This Means for Chip Stocks and Investors

Despite the semiconductor sector’s recent pullback, these large bullish options trades suggest that some investors remain confident in the growth potential of leading chipmakers Nvidia and Intel. The upcoming earnings season will be critical in confirming whether these bets pay off.

Investors should watch for volatility spikes and earnings results, which could trigger significant price moves in these stocks. The aggressive options activity highlights the ongoing interest in the semiconductor space amid evolving market dynamics.