NVDA Nov2025 Algo-Driven Sell-Off: Mechanical Breakdown & Key Factors

NVDA’s Nov2025 sell-off followed a strong Q3 FY26 earnings beat (Revenue $57.0B, up 62% YoY [1]) that initially drove a gap up to ~$195.95 [0]. However, the stock reversed sharply, closing down 7.81%—outperforming the NASDAQ’s -4.25% drop but underperforming the Tech sector’s +0.146% gain [0][4]. The sell-off was amplified by three key algo/hedging mechanisms:

1. Dealer Short-Gamma Amplification
   : Dealers were short gamma on NVDA [3], meaning price drops triggered additional selling to adjust delta hedges, creating a positive feedback loop [2][3].
2. Trend-Following CTA Triggers
   : CTAs switched from long to short positions as NVDA broke key price levels, adding selling pressure [0][4].
3. Vol-Targeting Fund Unwinds
   : Spiking volatility led these funds to reduce exposure, exacerbating the drop [5].

• Cross-Domain Feedback Loop
  : Negative gamma dynamics interacted with trend-following and vol-targeting strategies to amplify the sell-off, demonstrating how multiple algo types can align to drive extreme price moves.
• Stock-Specific Algo Flows
  : NVDA’s underperformance vs the Tech sector indicates the sell-off was driven by stock-specific algo activity rather than broad market trends [0][4].
• Split-Adjusted Clarity
  : The Reddit user’s mention of 614→584 refers to non-split-adjusted prices; tool data uses split-adjusted values (~196→179) [0].

• Risks
  : Negative gamma environments can lead to unexpected, amplified price swings even after positive earnings [2][3]. Traders should monitor gamma exposure levels (via tools like Fintel [2]) to mitigate risk.
• Opportunities
  : Understanding algo-driven feedback loops can help identify potential volatility triggers, though this requires careful monitoring of gamma and trend signals [0][3].

NVDA’s Nov2025 sell-off highlights the impact of algorithmic hedging and trend-following strategies on price volatility. Key data points include:

• Earnings: $57.0B revenue (62% YoY [1])
• Price Movement: ~196→180.64 (7.81% drop [0])
• Volume: 343.5M shares (39% above average [0])
• Sector Performance: Tech +0.146% (Nov20 [4])

This analysis does not constitute investment advice; traders should use risk management tools (stop-losses, position sizing) to navigate such environments [0][3].