Nvidia Corp. (NVDA)'s blockbuster $150 billion buyback announcement may have powered Monday's rally, but the AI chipmaker's reversal on Tuesday is giving traders another reason to pile into its leveraged inverse ETF.
The GraniteShares 2x Short NVDA Daily ETF (NVD) was once again among the market's most actively traded ETFs on Tuesday, extending the unusually heavy activity seen a day earlier. On Monday, NVD traded roughly 109.8 million shares, making it one of the most actively traded ETFs in the U.S. market.
NVD is designed to deliver -2x the daily percentage move in Nvidia stock, before fees and expenses. That makes it a high-octane way for traders to position for a short-term decline in NVDA rather than simply shorting the stock.
Nvidia Gives Back Monday's Buyback Boost
Nvidia gained 1.68% Monday to $228.86, with more than 142 million shares changing hands, after announcing the additional $150 billion repurchase authorization. The move lifted the company's total remaining buyback authorization to $235 billion.
But Nvidia reversed course Tuesday as technology stocks came under pressure from a sharp rise in Treasury yields.
That reversal matters disproportionately for NVD. Because the ETF targets twice the inverse of Nvidia's daily move, a decline in NVDA can produce an amplified gain in NVD for that session.
Tuesday Brought More Nvidia Headlines
The stock had plenty of fresh catalysts to digest.
Nvidia is reportedly exploring partnerships with insurers to help reduce the risks associated with loans backed by its AI chips. The initiative could make it easier for smaller cloud providers to finance Nvidia hardware, potentially broadening the pool of buyers for its accelerators.
Nvidia also continued pushing into AI-agent security. Its Open Agent Safety Platform, unveiled Monday, combines OpenShell software with a Sentry reference system designed to monitor and contain rogue AI agents. More than 100 organizations were identified as participants, including Microsoft Corp. (MSFT), JPMorgan (JPM), Salesforce Inc. (CRM) and SpaceX's SpaceXAI.
Why NVD Is Becoming a Trading Vehicle for Nvidia Volatility
NVD's activity shows that Nvidia's enormous market capitalization is spawning an equally active derivatives-like trading ecosystem around the stock.
The ETF's one-month average volume is about 84 million shares. NVD has also fallen roughly 48% year to date, underscoring how quickly an inverse leveraged ETF can lose value during a sustained rally in its underlying stock.
The takeaway is less about investors abandoning Nvidia and more about traders aggressively expressing both sides of the Nvidia trade. After Monday's record buyback sent NVDA higher and NVD lower, Tuesday's reversal once again put the inverse ETF in the spotlight.
