NVDA 7.81% Sell-Off Analysis (Nov 20, 2025): Drivers and Market Impact

NVIDIA (NVDA) experienced a 7.81% intraday drop on Nov 20, 2025, from an opening high of $196 to a close of $180.64, despite reporting a blockbuster earnings beat the previous day. This sell-off coincided with a broader market decline: NASDAQ Composite dropped 4.25% (largest daily decline in 6 months) and S&P 500 fell 2.96% [2]. Key drivers included:

1. Options Mispositioning
   : Over 100k contracts traded on NVDA’s Nov-21-25 $200 call, with implied volatility dropping by 54% after earnings, indicating traders expected upside but were caught off-guard [1].
2. Fed Policy Uncertainty
   : Saxo Bank noted Fed officials were split on rate cuts, pressuring growth stocks like NVDA [3].
3. Liquidity Crunch
   : Volume spiked to 343.5M shares (39% above 3-day average), exacerbating the decline [0].

• The sell-off was a combination of macro factors (Fed uncertainty) and technical factors (options activity, liquidity).
• NVDA’s decline was a major contributor to the NASDAQ’s drop, highlighting its influence on tech indices.
• The large number of expiring call options amplified the reversal, as traders sold shares to cover losses [1].

• Algo-Driven Volatility
  : Dealer short-gamma positions can amplify price movements [6].
• Fed Policy Risk
  : Higher-for-longer rates may continue to pressure growth stocks [3].
• Options Risk
  : Over-leveraged bullish bets can lead to significant losses during reversals [1].

• Short-term correction may present buying opportunities for long-term investors, but caution is advised due to ongoing macro uncertainty.

NVDA’s Nov 20 sell-off was driven by a mix of macro (Fed policy) and technical (options, liquidity) factors. The stock dropped 7.81% on high volume, coinciding with a broader market decline. Traders should monitor Fed policy statements, options open interest, and CTA fund flows for future price movements.