TL;DR
Buying NVIDIA puts after a drop and holding them lost money almost every time. I tested 19 NVIDIA drops from 2022 to 2026. A $1,980 hedge of puts 10% or 20% below the price lost money in all 19 by six months, and at-the-money puts made money once in 18. The NVIDIA calls they were meant to protect were up a median $5,200 by then.
Selling fast changed the result. Puts 20% below the price, sold the first time they were up 20%, made money in 14 of 19 drops and averaged +$128. That rests on 19 drops: on 153 drops in 12 other chip stocks, the same rule averaged a $279 loss.
NVIDIA calls usually came back
Median across NVIDIA's 19 drops. Calls were bought at the close before the drop.
The drop itself took a median $1,238 off $6,930 of NVIDIA calls, and none of the 19 were up at that close. A week later the median was down $1,690. That first week is when buying puts feels most urgent.
Six months later the median was up $5,200, and 14 of 19 drops ended with the calls profitable.
What I tested
On November 9, 2026, NVIDIA fell over 4% before the open while I held NVIDIA calls. I tested buying puts after NVIDIA's one-day close-to-close drops from 2022-05-09 to 2026-02-26.
The drops are NVIDIA's 10 worst days and its 10 most recent drops of 4% to 6%, keeping the first when several came within five trading days. The 2024-04-19 drop is left out because its contracts cost more than the budget before the 2024 split, which leaves 19.
Each test holds $6,930 of NVIDIA calls bought the close before the drop, expiring 190 to 260 days out. Puts are bought at the drop-day close, expiring 75 to 110 days out, at the money, 10% below the price or 20% below. I tested $1,980 of puts beside the calls and $6,930 of puts alone.
Prices are recorded daily closes: buys at the ask, values at the midpoint (or the last trade without a quote). To check whether NVIDIA's results hold up, I ran the same test on 153 drops in 12 related chip stocks, covered near the end.
A put hedge bought after an NVIDIA drop lost money
Median across NVIDIA's drops. Puts were bought at the close of the drop day. At the money: made money in 1 of 18. 10% below price: made money in 0 of 19. 20% below price: made money in 0 of 19.
Show the table · 19 rows, 6 columns
Scroll sideways to compare all columns. Select a heading to sort.
| 2022-05-09 | -9.2% | Not bought (one contract cost $2,585) | -$1,770 | -$1,055 | -$3,548 |
| 2022-08-26 | -9.2% | -$629 | -$1,750 | -$1,920 | +$5,200 |
| 2022-09-13 | -9.5% | -$1,365 | -$1,890 | -$1,980 | +$14,660 |
| 2022-10-07 | -8.0% | -$1,415 | -$1,780 | -$1,755 | +$34,748 |
| 2024-09-03 | -9.5% | -$1,220 | -$1,460 | -$1,600 | -$5,100 |
| 2024-10-15 | -4.7% | -$1,325 | -$1,440 | -$1,825 | -$6,680 |
| 2024-11-25 | -4.2% | -$948 | -$1,575 | -$1,832 | -$4,362 |
| 2025-01-27 | -17.0% | +$531 | -$822 | -$1,775 | +$3,248 |
| 2025-02-21 | -4.1% | -$1,275 | -$1,920 | -$1,875 | +$5,048 |
| 2025-02-27 | -8.5% | -$1,090 | -$1,470 | -$1,932 | +$8,505 |
| 2025-03-03 | -8.7% | -$1,440 | -$1,590 | -$1,860 | +$7,882 |
| 2025-03-06 | -5.7% | -$1,230 | -$1,500 | -$1,600 | +$9,188 |
| 2025-03-26 | -5.7% | -$1,015 | -$1,590 | -$1,946 | +$11,820 |
| 2025-04-03 | -7.8% | -$995 | -$1,400 | -$1,800 | +$24,400 |
| 2025-04-10 | -5.9% | -$1,325 | -$1,430 | -$1,780 | +$15,165 |
| 2025-04-21 | -4.5% | -$1,020 | -$1,590 | -$1,600 | +$19,485 |
| 2025-10-10 | -4.9% | -$1,615 | -$1,840 | -$1,900 | -$4,280 |
| 2026-01-20 | -4.4% | -$1,545 | -$1,480 | -$1,794 | +$540 |
| 2026-02-26 | -5.5% | -$1,430 | -$1,340 | -$1,750 | +$936 |
No matching rows. Clear the filter to see all records.
NVIDIA's 19 drops: six-month profit on a $1,980 put hedge, and on the $6,930 of calls
Held for six months, the hedge lost a median $1,252 at the money, $1,575 at 10% below the price and $1,800 at 20% below. The 20% put lost a median 91% of its cost.
Only one at-the-money hedge made money. The 2022-05-09 drop is left out at the money because one contract cost $2,585, more than the $1,980 budget.
Going all in on NVIDIA puts
Portfolio value (USD)
- 19 NVDA $150 puts expiring May 15, 2026 2026-08-27
- $280.00
- NVDA shares bought the same close 2026-08-27
- $8,545.09
19 NVDA $150 puts expiring May 15, 2026: 97.20% largest decline in plotted observations. 2026-03-06 ($10,017.50) to 2026-05-18 ($280.00).
This is one real drop. NVIDIA fell 5.5% on February 26, 2026, and $6,930 bought 19 puts 20% below the price at $3.50 each. The next day they were worth $9,495 at the midpoint, a 37% gain.
They peaked at $10,018 on March 6. NVIDIA closed at $225.32 on May 15, the expiration date, and the puts expired worthless. All that remained was the $280 the puts never used. The same $6,930 in NVIDIA shares was worth $8,545 six months after the drop.
All in on NVIDIA puts, across 19 drops
Median across NVIDIA's 19 drops. At the money: made money in 1 of 19. 10% below price: made money in 0 of 19. 20% below price: made money in 0 of 19.
Held for six months, $6,930 of NVIDIA puts lost a median 88.0% at the money and 97.3% at 20% below the price. One at-the-money position made money, and none of the out-of-the-money positions did.
When to sell NVIDIA puts you bought after a drop
Average across NVIDIA's 19 drops. +20% means selling at the first close where the bid is 20% above cost. Sales are at the recorded closing bid. The table below lists all 37 rules.
Show the table · 37 rows, 4 columns
Scroll sideways to compare all columns. Select a heading to sort.
| Hold to expiration | 0 of 19 | -$1,800 | -$1,767 |
| Sell at +10% | 15 of 19 | +$320 | +$56 |
| Sell at +20% | 14 of 19 | +$500 | +$128 |
| Sell at +30% | 12 of 19 | +$648 | -$44 |
| Sell at +50% | 10 of 19 | +$1,000 | +$75 |
| Sell at +100% | 4 of 19 | -$1,755 | -$689 |
| Sell the next day | 7 of 19 | -$250 | -$103 |
| Sell after 3 trading days | 10 of 19 | +$20 | +$31 |
| Sell after 1 week | 8 of 19 | -$80 | -$3 |
| Sell after 10 trading days | 4 of 19 | -$345 | -$318 |
| Sell at +10%, or after 1 week | 11 of 19 | +$160 | +$18 |
| Sell at +20%, or after 1 week | 10 of 19 | +$150 | +$22 |
| Sell at +30%, or after 1 week | 9 of 19 | -$80 | +$44 |
| Sell half at +10%, rebuy 30% below cost | 5 of 19 | -$1,055 | -$722 |
| Sell half at +10%, rebuy 50% below cost | 2 of 19 | -$958 | -$877 |
| Sell half at +10%, rebuy 70% below cost | 2 of 19 | -$916 | -$844 |
| Sell all at +10%, rebuy 30% below cost | 9 of 19 | -$488 | +$184 |
| Sell all at +10%, rebuy 50% below cost | 5 of 19 | -$320 | -$108 |
| Sell all at +10%, rebuy 70% below cost | 8 of 19 | -$48 | -$63 |
| Sell half at +20%, rebuy 30% below cost | 3 of 19 | -$1,075 | -$832 |
| Sell half at +20%, rebuy 50% below cost | 2 of 19 | -$841 | -$831 |
| Sell half at +20%, rebuy 70% below cost | 2 of 19 | -$715 | -$804 |
| Sell all at +20%, rebuy 30% below cost | 7 of 19 | -$605 | -$42 |
| Sell all at +20%, rebuy 50% below cost | 7 of 19 | -$135 | -$19 |
| Sell all at +20%, rebuy 70% below cost | 12 of 19 | +$185 | +$13 |
| Sell half at +30%, rebuy 30% below cost | 3 of 19 | -$1,055 | -$854 |
| Sell half at +30%, rebuy 50% below cost | 2 of 19 | -$779 | -$899 |
| Sell half at +30%, rebuy 70% below cost | 2 of 19 | -$697 | -$863 |
| Sell all at +30%, rebuy 30% below cost | 7 of 19 | -$436 | -$94 |
| Sell all at +30%, rebuy 50% below cost | 8 of 19 | -$210 | -$166 |
| Sell all at +30%, rebuy 70% below cost | 12 of 19 | +$224 | -$114 |
| Sell half at +50%, rebuy 30% below cost | 3 of 19 | -$1,055 | -$835 |
| Sell half at +50%, rebuy 50% below cost | 3 of 19 | -$926 | -$874 |
| Sell half at +50%, rebuy 70% below cost | 2 of 19 | -$766 | -$872 |
| Sell all at +50%, rebuy 30% below cost | 9 of 19 | -$296 | -$43 |
| Sell all at +50%, rebuy 50% below cost | 10 of 19 | +$124 | -$108 |
| Sell all at +50%, rebuy 70% below cost | 10 of 19 | +$444 | -$111 |
No matching rows. Clear the filter to see all records.
Every exit rule for $1,980 of NVIDIA puts 20% below the price (19 drops, six-month result)
Selling early turned NVIDIA puts from a near-total loss into a small average gain. Puts 20% below the price, sold the first time their bid closed 20% above cost, made money in 14 of 19 drops, with a median of +$500 and an average of +$128. Held to expiration, the same puts lost money in all 19 and averaged -$1,767.
9 of the 37 rules averaged a profit on NVIDIA at this strike, and none averaged more than +$184 on $1,980 at risk. With 19 drops, these averages come from a small sample.
One NVIDIA drop, three ways to sell
On the February 26, 2026 drop, $1,980 bought five of those $150 puts for $1,750. Held to expiration, they lost $1,750. Sold at +20% the next day, at $4.80, they made $650. Selling them, then buying them back once they fell 50% below cost, ended at a $135 loss.
Buying back made the result worse across NVIDIA's drops too. Selling at +20% and buying back 50% below cost averaged -$19, against +$128 for selling once.
Does this hold for other chip stocks?
NVIDIA: 19 drops. Other chip stocks: 138 drops where the put was bought. All 13 stocks: 157 drops.
I ran the same test on 153 drops in the 12 companies NexusTrade ranks as NVIDIA's closest relatives from SEC filings: AMD, Broadcom, Intel, Marvell, Qualcomm, Arm, Astera Labs, Synopsys, Lattice, NXP, MACOM and Analog Devices.
Selling at +20% lost $279 on average on those stocks. Across all 172 drops, none of the 36 exit rules averaged a profit at any strike, and the best rule (selling at +20% or after one week) lost $95 on average. Counting drops on the same few days once, the hedge lost a median $878 to $1,755, while the calls were up a median $2,487 at six months.
What this test cannot tell you
Nineteen drops is a small sample. My options data starts in 2022, and NVIDIA's drops lean on recent years: 10 are from 2025, 4 from the 2022 bear market and none from 2023. A long bear market is underrepresented.
These are daily closing prices. A put that spiked during the day and faded by the close counts as a miss, so the take-profit hit rates are a floor. Commissions are not included.
These results describe NVIDIA after it had already fallen. Puts bought before a drop and other expirations are separate questions. This is research, and it is not financial advice.
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Run the test yourself
Aurora, the AI agent in NexusTrade, can rerun the put side of this test on NVIDIA or a stock you hold. The request below uses the same drop selection, strike, budget and exits, and asks for research only.
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