Stocks owned by Nvidia surged on bullish options bets days before SEC filing
Trading in bullish options contracts tied to two small-capitalization companies owned by chipmaker Nvidia Corp. surged last week just days before the company released a routine filing. These options bets resulted in a significant increase in the company’s shares.
The surge in Nvidia’s shares was noteworthy, with the price increasing by over 95% between February 12 and February 16, from $6.64 to $12.95. The demand for call options tied to SoundHound, another company owned by Nvidia, also experienced a similar spike in demand leading up to the filing’s release.
Although Nvidia’s ownership of both Nano-X and SoundHound was known, the filing of Nvidia’s first 13-F filing with the U.S. Securities and Exchange Commission on February 17 triggered a rally in their shares. This led to significant gains for buyers of these call options, who were then able to capitalize on the increase in value.
Nano-X, an Israeli medical-device company, saw a drastic surge in the trading volume of out-of-the-money call options on February 12. Prior to this, there had been virtually no trading activity. However, the sudden surge in trading volume resulted in the strike price of $7.50, which was initially more than 10% out of the money, being more than 40% below the closing price on Friday.
Similarly, the trading volume for shares of Nano-X also increased leading up to Nvidia’s filing. On February 12, the daily volume rose from 412,241 shares to 3.9 million shares, and later peaked at over 47 million shares on February 15. This increase in volume was even more significant than that of SoundHound, which saw its shares rise by nearly 70% between February 14 and February 16.
Despite the significant gains, Nvidia’s positions in both Nano-X and SoundHound were relatively small, with the stake in Nano-X worth about $400,000 and the stake in SoundHound worth $3.7 million as of December 31.
While Nano-X shares experienced a decline of over 20% on Tuesday, closing at $10.34, shares of SoundHound AI continued to rise, finishing the day at $3.99.
Overall, the surge in trading volume and the significant gains in the value of these stocks highlight the impact of Nvidia’s involvement and the anticipation surrounding the release of the company’s filing.
Analyst comment
Positive news: The stocks owned by Nvidia surged on bullish options bets, resulting in a significant increase in the company’s shares. The demand for call options tied to SoundHound also experienced a spike in demand. The filing of Nvidia’s first 13-F filing triggered a rally in Nano-X and SoundHound shares, leading to significant gains for buyers of these call options.
As an analyst, it is likely that the market will continue to be influenced by Nvidia’s involvement and the anticipation surrounding the release of future filings. Investors may perceive Nvidia’s ownership of these companies as positive, leading to increased interest and potentially further gains in the market.
