$NVDA · Schwab Network · 2026-11-09

Nvidia shares continue to be under pressure today amid a leadership controversy. The company's board has launched an investigation against CEO Jensen Huang. This comes at a time when he has admitted to having an extramarital affair with a woman suspected of spying for China.

Nvidia's board said it had no reason to believe that national security or company confidentiality would be violated. While President Trump supported Huang's continued role as CEO , Huang apologized to his wife, family, and the company.

The controversy has compounded Nvidia's recent problems, as the share price has fallen more than 20 percent from its October high. Concerns about the funding of the AI ​​oom were already growing before today's situation.

My question is, the stock reached $243 on October 6 , which was 4-5 weeks ago, and then it crashed like this, people must be wondering why this happened.

This leads me to believe that someone may have known this in advance, or there was some whispering or news leaked, because there was no reason for Nvidia to act this way. Now, there's a lot of discussion about the Jensen Huang issue , such as the risk to the individual and the risk to the company, because Nvidia means Jensen Huang.

I don't know much about Nvidia's leadership model , but he will face intense scrutiny from his board and from politicians , and political scrutiny may be worse than the board.

So, this is not a problem that will be solved in a day. It will take time and facing the truth is a good start for Jensen Huang, but he will have to face the pressure.

Think of all the new politicians. They will want to engage with him and meet him. There are rumors that he has already been called to testify. This matter will not be resolved so quickly.

So, starting with the truth is a great idea, but it's going to be a long road for Nvidia.

I've read the apology, some of the reports, if not all of them, and you know, it reminds us of that trip where they had to pick up Jensen Huang halfway through. There are many different layers behind this.

In fact, I'm against the theory that someone knew something , because not only Nvidia, but many other companies have fallen in the last four or five weeks. So, the chip sector has completely collapsed and it has accelerated further in the past week.

So I think it was maybe a sector rotation out of the chip sector , maybe because of the perception that the Democrats were going to come into power, right? This might lead to more control over the construction of AI infrastructure , right?

This could negatively impact the future sales of these companies.

So, this could be the reason for the 27% decline we saw from the all-time high. I think the question investors want answered is, yes, their board, that is, Nvidia's board, is investigating, is that right ?

Seems logical. In fact, Jensen Huang is probably a friend to all of them, right?

Now, there are rumors and speculation that he could be called to testify today. What could be the consequences of contacting the woman he was in a relationship with? And was his phone ever in a place where that woman was without him?

I mean, these kinds of things, because he has relationships with other leaders in the tech sector , administrations, and investors , and then you have to think about those comments of his: "We need to allow high-end chips to be sold in China."

Or he has said it repeatedly, but he also emphasized that none of our results include any sales to China , because we have a number of regulations on this technology.

Even after receiving approval to sell the H200, Nvidia has not reported any sales in China. Now the question is, are the chips reaching China? Maybe it is arriving, but we don't know for sure at this point.

So, this is going to be a long-term process and you have to think—I think this is also working in the minds of investors—will he be removed? Will the board change him? Or will he resign himself ?

These are probably questions that need to be answered, but I don't think that's going to happen anytime soon.

Of course, especially since the board's investigation is ongoing. I'm sure there's surveillance and investigation going on at the government level as well, because there are allegations that he's a spy.

I've analyzed the issue and if you're optimistic about Nvidia in the long term, the first thing you need is time. You need time to calm down. Now, if the news turns around, Nvidia may move slightly or significantly away from this price.

It's hard to say exactly, but if you're looking for something long-term, I'd take until December 18th.

Tom and Diane, I have 39 days until December 18th. Maybe it's not enough, but this trade is giving me 39 days. I saw the expected move around 28.5 to 28.70. Let's round it up to $30 or $25, whichever you prefer.

It is actually in the middle. So what I saw was buying at the 180 strike and selling at the 205 strike. I made a long call vertical on Nvidia for $25.

It is now about $8 debit, although the trade is a bit higher, but it gives you an opportunity for $25. If your $8 debit reaches $25, it will yield more than three times the profit.

So, one of the advantages of this type of trading is that it gives you time and stability. And speaking of break even, if you pay $8 , the debit for this trade will be $188.

Tom, in this type of trade, I just wanted time from the bullish position, understanding the expected movement and creating a vertical spread that would give me time for everything to settle down.

Yes, let's analyze the matter. In this trade example from Kevin, the direction is bullish. We are going up to the December option. As he said, he's giving himself enough time for this.

Remember, they also have their earnings report next week. Keep that in mind.

Buying a December 180 strike call, which is $2.50 above the current price. And then sell the 205 strike call. So , a bullish call at $25 is vertical. You are debiting about $8.

This debit is your risk, which is about $800. In this case, the risk-reward ratio is quite good. If it goes above 205, you can make a profit of up to $1,700 by risking $800. The breakeven point of 188 that Kevin mentioned is only 6% above the current share price.

The December series is likely to fluctuate around $28 in either direction due to earnings reports in the options market. So, if there is an upward movement to $28, you will be at around the 205 level.

Perhaps that's why Kevin set this strike to reduce the cost of buying his bullish 180 call. Their current price is about $12. And he is selling the 205 strike call. Even though the 205 strike is $28 away from the current price, its current extrinsic premium is about $3.90.

So, Kevin is adjusting the cost of buying 180 calls by selling 205 calls.

So, this is a bullish call vertical. But I think the main thing is that Kevin gave himself enough time. And you don't have to wait until the end of the term to get out of it. If the price rises towards 200 after the earnings report , its value could rise to 15, 16 or 20 dollars.

This gives you the opportunity to close all or part of your position before expiration, if the market allows it. So, keep that in mind. This gives some flexibility when it comes to trade management.

Kevin, I've taken a slightly more passive and much more short-term approach to this. I took the deadline until the end of the week, the weekly options for November 13th. If you think this turnaround means Nvidia has reached $170.

We are already up more than $7 from the session low. I have considered selling an out-of-the-money neutral to bearish call vertical , if you think the stock will range in the near future or at least for the next four days.

I am selling the 13th weekly 185 call, which is on the out-of-the-money upside, and buying the 190 call. The $5 short range, which was trading around $1.40, is probably now trading at $1.20.

But the credit you are collecting is your income. So if I raise $1.40, meaning $140 , with $360 at risk, my break-even Kevin goes up to $186.40. It has a pretty good chance , but what you're thinking is that the stock will be limited for the rest of the week.

Yes, that's right. Very short-term trade. Looking to short the 185-190 call vertical which is trading at around $1.40. It's one that says, "Remember, the great utility of a short vertical, whether it's a call or a put , is what if nothing happens?

What if the stock stays within this range? And if nothing happens, it's profitable." So Tom is selling 185-190 , collecting $1.40, maybe a little less than that. It just says, "I don't expect any big leaps or major changes in the near future.

Sell those 185 calls. Add credit to that, whatever it is, that's your break-even on this trade. The risk is to subtract the credit you took from the $5.

Yes, and you have about a 71% chance that that short 185 strike will be out-of-the-money at expiration, which is what you want, right? You want the stock to stay below 185 and this thing to become worthless or you buy it for less than the credits you collected.

So this is Diane , for you. A slightly passive strategy from neutral to bearish, as opposed to Kevin's directionally bullish example.