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    Nvidia’s shares drop 2% amid Chinese antitrust investigation

    by VT Markets
    /
    Sep 15, 2025
    China started an antitrust investigation into Nvidia in December 2024 for allegedly breaking anti-monopoly laws. This is seen as a reaction to US restrictions on chip technology. The country’s market regulator has confirmed that the investigation is still in progress. As a result of this news, Nvidia’s shares dropped about 2% in pre-market trading. We believe this antitrust investigation will cause more ups and downs in Nvidia’s stock in the coming weeks. The implied volatility for near-term options has already risen, with the 30-day IV going over 55%. This increase makes both puts and calls more expensive. In this situation, strategies that profit from price fluctuations, instead of just movement direction, should be considered. Due to the uncertainty, we are looking to buy put options to protect our long positions or to bet on further declines. China has historically contributed around 15-20% of Nvidia’s revenue, even with US restrictions that grew stricter in 2023. If this investigation causes more issues, it could significantly affect future earnings and how investors feel about the company. For those who think this is just a temporary overreaction, selling out-of-the-money put credit spreads might be a good strategy. This allows us to earn premiums from the higher volatility while betting that the stock won’t drop much more. After a strong performance in late 2024 and early 2025, many may see a small pullback as a chance to buy. It’s important to note that similar investigations into big tech companies usually take years to resolve. This means that, while the initial shock may lessen, Nvidia’s stock could still be impacted by news for months. This might lead to sideways trading instead of a clear upward or downward trend, making strategies like iron condors more potentially profitable.

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