Someone posted that because there are 136k calls (outpacing puts) for Nvidia that it must mean that the mythical creatures known as hedge fund operators will not allow such winning to take place.

I beg to differ. First how much is 136K calls in real dollars. Well, at a $130 strike price the dollar amount is $1.768 billion. If I add the 80K calls at 140 the dollar amount is $1.12 billion.

So with a total of $2.888 Billion the losses or hedged gains would mostly stem from price differential and fees.

For the fees you would assume on an average of 8% (maybe it's more or less) on 216K contracts of an average price of $135 you would be looking at taking in $233.28 million in collected fees.

Also, hedge funds employing these tactics are a fraction of the overall market.

Here is what the big 3 investor classes amount to percentage wise.

• Institutional Investors: 60-70%
• Hedge Funds: 10-15%
• Retail Investors: 15-20%

Of that 10-15% hedge funds only a fraction of that engage in short strategies of like 20-30%.

This translates to roughly 2-4.5% of the overall market.

Regarding the fees at $233 million let's say 75% of that was hedge funds trying to time the Nvidia top and bet against it. That's ~$175 Million of received fees and much higher exposure to loses actual losses. Mind you the current market cap of Nvidia is $3.18 TRILLION.

The idea is that they are buying these calls to hedge losses on an underlying short position. So what would be the short position of this type of strategy against the 216 *(75%)?

Roughly, let's use the $175 Million in collected fees as our guide. Remember covered calls you lose the opportunity of the upward price action but get the fees and naked calls can incur unlimited losses in the upside minus fees collected. On the downside you would only collect the fees.

Keep in mind, the strategy is a double edge sword too. Do you own the underlying stock? Not likely for the hedge fund. More than likely they are going in naked. Why own the stock if you're worried about shorting it. Doesn't make any sense. Naked it is.

At that point naked call options are in fact, bearish. You're doubly bearish at this point with shorts naked calls.

on that $175 million of fees collected let's say you are strongly convicted in your trade that it won't go up too much and you have some fees for protection. What would be your actual short position?

Let's use 50%, 100%, 200% and 1000% above the fees collected. Anything above 50% in my opinion is ridiculous but let's have at it. Hypothetically:

• 50% Above Fees: The short exposure is $262.5 million.
• 100% Above Fees: The short exposure is $350 million.
• 200% Above Fees: The short exposure is $525 million.
• 1000% Above Fees: The short exposure is $1.925 billion.

If you think that $175 million in collected fees with a down side short exposure of $262 million to $1.9 billion is supposed to scare away RETAIL INSTITUTIONAL investors because "they won't allow retail to win" well, I have some ice to sell you when you come up to Alaska.

There is no way someone is guarding 2 Bill with 175 million either. 50% to 200% makes a lot more sense. Keep in mind, Nvidia trades roughly $45 billion a day. Your calls that are hedges are nothing compared to this. 216K calls anyway you look at it ain't really shit.

Now, imagine where those naked calls have to start to unwind on an upward price action and they have to actual purchase the underlying stock. That is MOASS on top of MOASS.

TLDR; The thing (selling call hedges) you thought was significant isn't really all that significant on the backdrop of a $3.2 Trillion dollar stock.