A key sector in artificial intelligence trading suffered a heavy setback on Wednesday, with traders betting that the decline could further deepen.

The stock price of neocloud, a company that provides the necessary GPU access rights for artificial intelligence as a service, plummeted on Wednesday due to the continued rise in debt yields of CoreWeave supported by NVIDIA. (An article in The Financial Times stated that the company is targeting insurance companies for further debt financing, which seems to have been of little help as well.)

At the same time, Social Capital founder Chamath Palihapitiya posted on X, questioning the private credit bubble, and attached a screenshot showing that the yield of CoreWeave bonds had reached 15%. Elon Musk replied with “yikes”. The stock price of CoreWeave fell by 15%. Nebius Group and Iren, two popular trading targets related to data center expansion, also saw a drop of up to 10% for a time.

The trading volume of CoreWeave options soared to more than 7 times the 30-day average, Nebius approached 4 times, and Iren reached 2 times the normal level. According to the data of Cboe LiveVol, there were more call options traded in Nebius and Iren than put options, but it is possible that more of the call options in both cases were initiated by sellers rather than buyers.

The most extreme trade occurred at CoreWeave, where the trader bought nearly 200,000 put options, while only 106,000 call options were purchased.

SpotGamma data shows that the most notable transaction occurred around 10 a.m. Eastern Time, when someone opened 26,000 new short positions in put options with an expiration date of December 18 and an exercise price of $37.5. The trading price of these contracts was close to the selling price, indicating that these put options were purchased.

The CEO of Prosper Trading Academy, headquartered in Chicago, Scott Bauer, stated: "These are bubble put options. They are not the kind of short bets you buy with the expectation that they will go to zero. This is a hub for artificial intelligence trading, possibly some form of margin trading used to hedge exposures in highly correlated stocks, and could even be exposures to the NASDAQ index."

Each of these contracts is sold for 74 cents, with a total value of $1.9 million, and it requires CoreWeave to fall another 42% within the next two months for this trade to be profitable. Before this trade, the number of open contracts was slightly over 1,000, indicating that this is a new position being established.

CoreWeave completed its initial public offering in March 2025 at $40 per share.

Bauer added, "Maybe this is someone who bought early on, or someone who participated in IPO. They say this is my break-even point. Perhaps they cannot obtain such protection with other stocks, indices, or other products."