Triple Witching Turbulence: How to Play Volatility in Tech's Big Three

The June 20, 2025, triple witching event—a $6.5 trillion derivatives expiration—has thrust NVIDIA (NVDA), Tesla (TSLA), and AMD (AMD) into the spotlight. With record option volumes, dealer hedging wars, and gamma exposure at extremes, the stage is set for a volatility reset. Here's how to navigate the storm.

The Triple Witching Backdrop: Pinning, Gamma, and the Unpinning Reset

The S&P 500's stubborn resistance near 6,000 is no accident. Pinning effects—driven by massive open interest around this strike—have kept volatility artificially suppressed. Dealers holding positive gamma positions (buying dips, selling rallies) have smoothed price action for weeks. But on June 20, as contracts expire, this stabilizing force vanishes. The result? A gamma flip where dealers may shift to negative gamma, amplifying swings if markets break decisively above 6,200 or below . This dynamic applies to individual stocks too, particularly the tech trio.

NVIDIA (NVDA): AI's Double-Edged Sword

NVIDIA's stock dipped -0.39% on June 19, but its options market roared. The $130 call saw 103,355 contracts traded—a staggering figure signaling bullish bets on its AI-driven healthcare and China Expo momentum. Meanwhile, the $140 put's 48,795 volume reflects lingering fears of inventory overhang and competition.

Gamma Exposure: NVIDIA's $130–$140 strike cluster holds $2.1 billion in open interest. If the stock breaks below $135 post-expiration, dealers may flood the market with 20 million+ shares to hedge gamma, pushing prices lower. Conversely, a rally above $145 could trigger a short squeeze.

Trade Idea: Buy the $135 put/$145 call strangle. If volatility spikes post-unpinning, this profits from either a crash or a surge. Target expiration: July 18, 2025.

Tesla (TSLA): Retail Bulls vs. Bearish Catalysts

Tesla's -3.90% drop on June 19 masked a bullish options anomaly: the $330 call surged with 40,739 contracts traded, 67% bought by retail traders. Yet, implied volatility fell 16.5%—a sign of reduced perceived risk. Meanwhile, lawsuits over FSD misrepresentation and the Pennsylvania train collision loom as negatives.

Gamma Exposure: The $320–$340 strike range holds $1.8 billion in open interest. A post-expiration close below $320 could trigger a $7 billion gamma-driven sell-off. Conversely, a breakout above $350 might fuel euphoria around its June 28 Robotaxi launch.

Trade Idea: Sell the $320–$340 straddle (calls + puts). If volatility collapses post-unpinning and TSLA consolidates, this profits from premium decay. Exit by July 5.

AMD (AMD): The AI Chip Upstart

AMD's 0.56% gain on June 19 was fueled by its $140 target upgrade and Microsoft partnership. Its options volume surpassed Tesla's, with the $120 call (2,552 contracts) and $130 call (103,355 contracts) dominating. Insider purchases—like Mark Papermaster's 17,500 shares—add credibility.

Gamma Exposure: The $120–$130 strikes hold $900 million in open interest. A post-expiration dip below $115 could unleash $5 billion in gamma-driven selling, while a rally to $140 might spark a short-covering surge.

Trade Idea: Buy the $120 put/$135 call spread. This profits from a post-expiration bounce to $130+, leveraging AMD's AI tailwinds. Target exit by August 1.

Dealer Dynamics and the Volatility Reset

The triple witching's true impact unfolds after June 20, as dealers unwind positions. Look for:
- Gamma flips: Dealers may go negative gamma, amplifying swings.
- Liquidity gaps: Reduced trading post-Juneteenth holiday could magnify moves.
- Macro catalysts: Fed policy (July 25 meeting) and Middle East tensions will feed volatility.

Final Strategy: Position for the Unpinning

1. Volatility Plays: Buy VIXY or UVXY ahead of June 23. Exit if the VIX spikes >25%.
2. Sector Rotation: Short overbought sectors (e.g., consumer discretionary) and go long semiconductors (SOXX ETF).
3. Tech Trio Specifics:
4. NVDA: $135 put/$145 call strangle
5. TSLA: $320–$340 straddle (short)
6. AMD: $120 put/$135 call spread

The $6.5 trillion triple witching isn't just an event—it's a volatility time bomb. For tactical investors, this is the moment to capitalize on gamma flips, dealer hedging, and the unpinning reset. Ride the turbulence, and profit from it.