Funding the AI Melt Up

NVIDIA (NVDA) has transitioned from an AI sector leader to a funding leg for more speculative momentum trades, with its volatility and return spreads relative to the SMH ETF hitting record lows.

Key Takeaways

• 1.NVDA is acting as a funding source for other AI trades rather than leading the current market move.
• 2.The volatility and return spreads between NVDA and the SMH ETF have reached historic lows, suggesting an extreme compression setup.
• 3.NVDA's technical breakout lacks momentum, potentially due to heavy call overwriting.

Table of Contents

• Above the huge range
• The AI king stopped leading
• NVDA "anomaly"
• NVDA skew
• NVDA vs SMH vol

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