Nvidia's wild price swings have had a strong impact on the entire market, and the chipmaker's “wild” options trading may be to blame. The tech giant's stunning 8% gain on Wednesday helped lift the entire S&P 500, which had previously fallen on mixed inflation reports. Nvidia shares rose nearly 2% on Thursday. While some believe Wednesday's gains were driven by CEO Jensen Huang's upbeat comments about artificial intelligence, others believe the move was primarily triggered by a burst of short-term options trading activity at Nvidia. Wells Fargo's trading desk said in a note to clients Thursday, “I don't think the 8% rally in the stock yesterday was driven by fundamentals.” The desk noted that a series of Nvidia call options are set to expire on Friday and are set to expire on Wednesday. The most actively traded contracts. A call option gives the owner the right to purchase an underlying security at a set price at a specified time. Investors typically make profits when the price of the underlying security rises. “It’s crazy to me that the SEC is allowing the stock market to be gamified to this extent without considering how the gamma swings from a single stock option on a weekly (soon to be 0DTE) basis will ripple through cash. market, and the impact they will have on the market,” Wells Fargo traders wrote, referring to the SEC and zero-day expiry options. NVDA YTD Peak Nvidia Nvidia's market capitalization exceeded US$3 trillion in early 2024 and is currently the third largest stock in the S&P 500 Index after Apple and Microsoft. The chipmaker and the artificial intelligence story it represents have dominated investor sentiment all year, influencing other semiconductor stocks, the technology sector and the broader market. Its average daily percentage change over the past 50 days is 3.6%, which means that on any given day, its market cap changes by just over $100 billion, according to Oppenheimer's trading desk. “This year's market capitalization has seen moves up and down the likes of which we have never seen before,” Oppenheimer said in a note.