Nvidia options traders bet on a longer-term recovery as Huang’s exit rattles the chipmaker

The resignation lands, and the options desk answers first

Thursday 12 November, Nvidia said Jensen Huang had resigned as president, chief executive and board member, effective immediately, ending a 33-year run at the company he co-founded in 1993 and built into the world’s most valuable maker of artificial-intelligence chips. The board named finance chief Colette Kress interim chief executive and appointed Harvey C. Jones, a former Synopsys chief executive and board member, as its first-ever chairman.

The shares fell more than 10 percent in premarket trading and were last down 4.84 percent at $165.40, with the company’s market value slipping below $4 trillion for the first time since 2025. But the options market told a different story: traders cashed in parts of their bets against Nvidia and repositioned for a longer-term recovery, rolling bullish positions further into 2027 rather than abandoning the stock, according to Susquehanna’s Chris Murphy.

The tape: $18.9 million banked, 50,000 calls bought, targets lowered

Several large trades showed the repositioning in detail. In one, an investor sold puts and bought cheaper ones, collecting about $18.9 million while keeping some protection. Another paid about $18.8 million for call spreads, a bet paying fully if Nvidia climbs about 16 percent from current levels by March. Others pushed bullish positions out three months and lowered targets, buying time for a recovery. Investors also bought about 50,000 January calls for an estimated $45.3 million to $55 million, betting the shares rise above current levels by expiry.

The context for all of it is the reason Huang left. The 63-year-old, who is married, admitted on Sunday 8 November that he had been unfaithful to his wife and apologised to his family and colleagues, without naming the other party. Reports had linked him to Alice Huang, a former executive at Singapore-based Megaspeed, Nvidia’s primary business partner in Southeast Asia, whom US authorities suspect of links to Chinese intelligence. The New York Times then reported a second affair, with Kimberly Powell, a Nvidia vice-president overseeing healthcare who reported to him. The board, which had voiced confidence in Huang on Sunday, met on Wednesday night to consider his ouster. By Thursday morning he was gone, after reports that the board was preparing to move against him.

The uncertainty is priced into the options themselves: Nvidia’s 90-day implied volatility has climbed to about 52 percent from roughly 33 percent a month ago, and should stay high until next week’s earnings report and call. “Nvidia’s competitive advantage and customers don’t disappear overnight,” said Seth Hickle, chief investment officer at Mindset Wealth Management. “The market is trying to determine whether this is a temporary leadership crisis or something that fundamentally changes the AI investment thesis.”

The questions no options contract can answer yet

First, who leads Nvidia next, and when. The board will consider internal and external candidates, and Kress keeps her finance role during the interim, but no timetable or frontrunner has emerged.

Second, what the investigations will find. Nvidia opened an independent inquiry into whether Huang was targeted by a foreign intelligence effort; the FBI and Congress are examining the same questions. The House Select Committee on China still wants Huang to testify, and its chairman, John Moolenaar, has said lawmakers are prepared to seek a subpoena if they cannot agree a date. No findings have been published, and no subpoena had been announced as of Thursday.

Third, what the options flow really means: the January call buying and the 2027 rolls look like conviction, but may be hedges, repositioned rather than new money. The earnings report on Tuesday 17 November, due at about 1:20 p.m. Pacific Time with a call at 2 p.m., is the first hard test of whether the demand story that made Nvidia the centre of the AI boom still holds without the man who built it.

One resignation, and the whole AI trade has to re-price itself

Nvidia is not an ordinary large company. It supplies most of the chips that power advanced artificial intelligence, and its market value had carried it past $4 trillion, a weight that made its shares a proxy for the entire AI investment case. When its chief executive leaves in a scandal, the question is never only about one company: does the boom’s central bet, that demand for AI computing grows for years, survive contact with a governance crisis?

That is why Thursday’s options flow matters more than the share price: a market that believed the thesis broken would have fled, yet traders paid tens of millions for time, pushing bullish bets into 2027 and buying January calls. The price of that patience is visible in volatility: at about 52 percent, the options market charges a steep premium for uncertainty, until the earnings call offers clarity on how Nvidia plans to move forward.

The stakes extend beyond shareholders. Nvidia has poured its swelling cash pile back into cloud providers, suppliers and the industry’s biggest laboratories, bankrolling the ecosystem around it. A leadership vacuum at the top of that chain reaches customers, rivals and governments debating chip exports to China; days before the numbers show whether the business itself is still growing.

Which crisis is this; a leadership crisis, or a crisis for the AI thesis?

The options market’s answer, on Thursday at least, is a leadership crisis, and the distinction is in the structure of the trades. Traders who believed Nvidia’s business was broken would sell calls, buy puts and leave. Instead they sold puts to bank $18.9 million, bought cheaper ones to keep some cover, and paid $18.8 million for call spreads that need a 16 percent climb by March. They pushed positions three months further out and lowered their targets, investors who still believe in the destination but want more time and a lower bar. The 50,000 January calls, at $45.3 million to $55 million, are a defined-risk wager on a rise from here, not a surrender.

The counter-reading: time is exactly what the trade cannot buy. The new chief executive is unknown, the board’s investigation is unfinished, Congress may yet compel Huang to testify, and the earnings report on 17 November will be delivered by an interim chief holding two jobs. Implied volatility at 52 percent says the market expects sharp moves either way, and Hickle’s warning cuts both ways: clarity could confirm the recovery bet, or show customers already looking elsewhere. The options flow is evidence of conviction, but it is conviction bought with other people’s patience, and the bill comes due on Tuesday.

What breaks next if the recovery bet is wrong?

The first consequence lands on Nvidia’s rivals: Al Jazeera’s live coverage noted rival chipmakers rallying as Nvidia slumped, and a sustained discount on the market leader opens a door competitors have awaited for years. If customers begin dual-sourcing in earnest, the shift could outlast any chief executive.

The second lands on the AI supply chain: a company in transition spends more cautiously, and the suppliers living on its orders feel it first. The third lands in Washington, where the affair has fused a personal scandal to the export-control debate: Congress wants to know whether Chinese intelligence obtained anything, and the answer will shape how tightly the United States polices the chips at the centre of the AI race. That debate over chip exports to China was already running before the resignation, and the scandal has now given it a sharper edge.

And the fourth lands inside Nvidia itself. An interim chief who is also chief financial officer can steady a company but cannot settle its strategy, and talented executives rarely wait through a long search. If the board takes months to choose, the recovery the options traders paid for may arrive to find a thinner company than the one they bet on.

Three dates that will settle the argument

Tuesday 17 November comes first: Nvidia reports third-quarter fiscal 2027 results at about 1:20 p.m. Pacific Time, with a call at 2 p.m. Kress faces investors holding both roles, and the call’s guidance matters more than the quarter itself.

Then the search: the board will consider internal and external candidates, and every name floated, including, in Al Jazeera’s live coverage, former Apple chief Tim Cook, signals continuity or a break. Then Congress: talks are under way over Huang’s testimony, with a subpoena in reserve if no date is agreed. Until those three questions have answers, the options market’s verdict stands as Thursday’s best guess; and the January calls are a clock ticking on it. The shares had already fallen 8 percent after hours once this week, when the board’s intentions first became public, and President Donald Trump has already weighed in, calling Huang “honorable”.