Analysis Report: NVDA Trading Gains & SPX vs SPY Discussion

A Reddit user (OP) shared they recovered from a $10k loss on NVIDIA (NVDA) put options to net $50k over two weeks, noting Robinhood incorrectly displayed their gain as 5% instead of ~400% [4]. The thread included debates on:

1. OP’s gains being impressive vs. potentially fraudulent
2. SPX options having lower liquidity and higher spreads than SPY

NVDA’s volatility over the two-week period (Nov 8–22) directly enabled the OP’s put trade recovery:

• The stock dropped 7.81% on Nov 20 and an additional 1.3% on Nov 21 [0], which would have boosted the value of put options (since puts gain when the underlying stock falls).
• Tech sector performance on Nov 22 was the second-lowest among all sectors (+0.146%) [2], reflecting broader market caution toward AI stocks like NVDA.

Michael Burry’s recent bearish comments on NVDA (questioning chip longevity and stock dilution) [3] may continue to fuel volatility. Though Burry exited some positions, his high-profile stance could influence retail trader sentiment.

Mixed: NVDA remains a top AI stock (with 24,000% gains over 10 years [3]), but recent price swings and legal issues (e.g., Figure AI lawsuit, backed by NVDA [3]) have introduced uncertainty.

1. NVDA Price Volatility
   :
   • Nov 14: +4.00% gain
   • Nov 20: -7.81% drop
   • Nov 21: -1.30% drop [0]

2. SPX vs SPY Liquidity & Spreads
   :
   • SPY options have tighter bid-ask spreads (~$0.02) vs. SPXW (~$0.20) [1].
   • SPY is more efficient for retail traders (smaller positions), while SPX is favored by institutions for larger contract sizes and tax benefits [1].

3. Sector Performance
   :
   • Tech sector: +0.146% on Nov 22 (second-lowest gain) [2].

• Direct
  : NVDA stock and options (core of OP’s trade).
• Related
  : SPY options (retail-friendly alternative to SPX) and SPX options (institutional-focused).
• Sector
  : Tech sector (NVDA is a key component).

• Exact details of OP’s put positions (strike price, expiration date) are unknown, making it hard to verify their gain calculation.
• Robinhood’s gain display error: No data on whether this is a systemic issue or isolated case.

• SPX vs SPY
  : The Reddit comment about SPX’s lower efficiency is valid for retail traders (due to wider spreads), but SPX is efficient for institutional traders (larger contracts, tax benefits) [1].
• OP’s Gains
  : NVDA’s volatility supports the possibility of significant put gains, but without trade details, verification is impossible.

• Option Trading Risk
  : NVDA’s high volatility (e.g.,7.81% drop in one day [0]) means option trades carry extreme risk—users should only trade options with capital they can afford to lose.
• SPX for Retail
  : SPX options have wider spreads [1], which can erode profits for small retail traders—consider SPY instead for better execution.

• NVDA’s upcoming price movements (especially in response to Burry’s comments [3]).
• Tech sector performance (to gauge broader market sentiment toward AI stocks [2]).
• Updates on the Figure AI lawsuit (backed by NVDA [3])—could impact investor confidence.