NVIDIA put options surge! The tech myth collapses, Wall Street shifts to a risk-averse mode

After two consecutive years of a bull market in tech stocks, Wall Street investors are clearly shifting to a risk-averse mode.

As concerns about the U.S. artificial intelligence and economic outlook heat up, the once "unstoppable" tech giants are losing their luster. So far this year, the index related to the "seven giants," led by NVIDIA, has fallen by 6.5%, in stark contrast to the more than threefold growth over the past two years. Traders are increasingly seeking protective strategies, and the options market has issued clear warning signals.

The Halo of Tech Giants Fades, Investors Accelerate Search for Protection

Joe Mazzola, head of trading and derivatives strategy at Charles Schwab, said, "The stocks that returned investors over the past two years are now taking a hit." Various data indicate rising tension across the board, from implied volatility to skew (which measures the cost of put options relative to call options) to the put/call ratio.

Since the second half of February, the option costs for most of the "seven giants" companies have risen significantly. Apple's three-month implied volatility reached its highest level since last September last week, with its skew being the steepest since last August.

Meanwhile, NVIDIA's put option positions are rapidly accumulating. According to Nomura Securities data, contracts with strike prices between $115 and $130 have led to negative gamma accumulation for traders, which could exacerbate price volatility as traders adjust their positions.

In the past five days, NVIDIA's stock price has fallen by 8.74%, closing at $124.92 last Friday.

Regarding the future trend of MAG 7, analysts at GF Securities pointed out, in summary, liquidity disturbances or event-driven shocks will not reverse the market trend, but fundamental issues may cause a longer adjustment period or even a trend reversal.

Market Sentiment Shifts, Risk-Averse Mode Fully Activated

This risk-averse sentiment is not limited to tech stocks. Around February 18, institutional investors began to purchase hedging tools against the surge in the Chicago Board Options Exchange Volatility Index (VIX) in large quantities. Until last Friday, before a slight rebound in the S&P 500 index, pessimistic sentiment had pushed the gap between the VIX and the actual volatility of the S&P 500 to its highest level since last December.

Rocky Fishman, founder of the derivatives analysis firm Asym 500, pointed out:

"The rise in VIX over the past few days has largely not matched the actual volatility of the S&P 500, making the implied volatility of the S&P 500 look particularly expensive."

Analysis indicates that potential new tariff policies add more uncertainty for businesses, further increasing the cost of options protection.

In the interest rate market, risk-averse sentiment has also recently dominated. Mild inflation data has raised expectations for a Federal Reserve rate cut. Last Friday, the yields on U.S. two-year, three-year, and five-year Treasury bonds approached 4% for the first time since last October, while the yield on the ten-year Treasury bond fell to 4.2%It is worth noting that even after the rebound in stock prices triggered by DeepSeek AI at the end of January, the bullish momentum in technology stocks has begun to fade, volatility has increased, the put skew has steepened, and the call-put ratio fell to its lowest level since September of last year last Thursday