As NVDA hits another all-time high, institutions are betting on the further-out Jun5

I took a look at the options desk for $NVIDIA(NVDA.US). On 4/27, it just hit a new all-time high of $216.83, with its market cap standing at $5.3T. It gained 20% in April alone, and the entire chip sector followed suit, getting hot. However, the capital flow I observed isn't the "chase it now" type—it's a two-legged strategy: large orders for Jun5 ATM Calls are the main position, and small orders for May29 OTM Calls are the probability extension, with a total size of $3.10M.

The timing choice is quite crucial. Jun5 is 38 days from now, already covering the post-earnings window; May29 is 31 days from now, a near-term OTM extension with a 7-day gap. If institutions were aiming for "the jump on earnings night," they'd buy closer-dated options. Choosing Jun5 as the main position suggests they're betting not on the jump itself, but on the trend continuation after the jump—this is a conviction position, not an event-driven one.

The small May29 OTM leg is more like an added elastic position, thinking "if it can rise another 8% within a week, I double my money; if not, the loss is minimal"—this is probability-based thinking.

If I were to replicate this myself, I'd allocate capital 7:3. The main leg is Jun5 ATM Calls, betting on whether catalysts in late May to early June can confirm the trend continuation—specific catalysts could be the Computex conference, major partner orders, or another round of guidance upgrades. The small May29 +8% OTM leg acts as a probability lottery ticket, cheap in price, with expected value tied to the odds.

Maximum loss remains total loss of premium. My stop-loss is set at breaking below $200—this is 8% below the all-time high. Falling through here would indicate momentum is over, the main leg's trend logic fails, and it's time to exit. The small OTM leg has no stop-loss; it either hits or goes to zero.

Two points to be wary of: First, JPM's Mislav Matejka already stated on 4/28 that the Mag-7 won't repeat last year's outperformance, and market breadth may expand, which conflicts with the "NVDA stands alone" trend theory. Second, the analyst average target price is $274.38 (implying +27% upside), but one Sell rating has already appeared—this signal of "a Sell popping up among an overwhelming majority of Buys" cannot be ignored at an all-time high.

But if sector rotation really pulls capital away from NVDA to AMD, Broadcom, then both legs will be drained. So this is a conviction position, but don't make it heavy.