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You ever walk into a situation where everyone is betting the same way? That’s when my radar goes off.
Because in this game, when everyone is leaning one direction, somebody is about to get their face ripped off — and it’s usually not the house.
Let me tell you what happened with Nvidia (NVDA) and why it’s a masterclass in reading the room.
The Setup: 5-to-1 and Dead Wrong
Tier One Alpha lead analyst Jacob Sharp flagged something interesting before NVDA’s earnings: the call buying versus put buying was running about 5-to-1. That means for every one trader buying puts, five were loading up on calls.
If you’re a contrarian street trader like me, that’s not a bullish signal — that’s a terrible sign. When the crowd gets that lopsided, market makers don’t just notice it, they lean into it.
They skew pricing to make those calls look even more attractive, pulling traders in like moths to a flame. They let the frenzy build until premiums get so fat they can barely fit through the door.
Then once everyone is overcommitted, they scoop up that high premium on the calls. What a payday.
The stock didn’t explode to the extreme levels the crowd expected. Instead, it rolled over, leaving all those call buyers holding the bag.
The Lesson: Market Makers Don’t Lose
This is the part traders often miss. Market makers play the long game, and they don’t need the stock to move right away — in fact, they prefer when it doesn’t.
The longer they keep everyone guessing, the more premium they pull in. That’s why I don’t follow the herd.
I don’t care how hot the stock is or how loud the cheerleaders are. If the flow is that one-sided, I’m either stepping aside or looking for the smarter angle.
NVDA was a perfect example. The setup was obvious, the crowd walked straight into it and by the time the move finally hit, the market makers had already locked in their win.
Moments like that are exactly why I love keeping an eye on after-hours action — that after-hours stuff is good stuff.
I’ve been trading since the eighties, and I’ve seen this same pattern play out over and over. The tickers change, the hype shifts, but the psychology behind it stays the same.
When the odds look too good to be true, they probably are.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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