NVIDIA Leads Sharp 4.3% Drop on US Stock Market Holiday: How TradFi Perpetual Contracts Front-Run Election Week and the Chip Sell-Off Wave?

Author: TokenInsight

Compiled by: TechFlow

TechFlow Summary: While US stock markets are closed during weekends or overnight windows, 24-hour-trading traditional finance (TradFi) perpetual contracts on crypto exchanges have emerged as the first pricing frontlines to reflect breaking news. Following Nvidia's board announcement of an independent review committee last Sunday, OKX's NVDA perpetual contract fell by 4.3% within 4 hours.

During the same week, shifting dynamics in the US midterm elections combined with a 12.25% plunge in the Philadelphia Semiconductor Index on November 5 drove a 46.5% week-over-week surge in total weekly volume across all TradFi perpetual contracts, reaching $321.5 billion. Their share of total crypto exchange volume rose to 25%. Binance accounted for 51.4% of the market share, while open interest for SOXL surged 2.9 times.

On Sunday, November 8, when US stock markets were closed, the NVDA perpetual contract fell by 4.3% within four hours starting at 15:00 ET. That day, Nvidia's board announced the formation of an independent committee to review reports concerning Jensen Huang.

At the reopening of the evening session at 20:00 ET, Nvidia's stock opened 3.7% lower compared to Friday's 20:00 close; over the identical timeframe (Friday 20:00 to Sunday 20:00), the perpetual contract dropped 3.6%, closely mirroring the trend. Combined with the US midterm elections and the chip selloff wave, the weekly volume of TradFi perpetual contracts grew 46.5% week-over-week.

Three Key Market Themes Last Week

· Midterm Elections: Democrats won majorities in both chambers. Seven Senate seats flipped from Republican to Democratic (according to NBC and other media tallies).

· Major Selloff in Chip Stocks on Nov 5. The Philadelphia Semiconductor Index plummeted 12.25% in a single day, marking its worst single-day performance since March 2020.

· Gold Strengthens, Oil Weakens. Gold perpetual contracts rose 4.0% over the week, while crude oil perpetual contracts fell 11.8%, and Nikkei 225 perpetual contracts dropped 7.8%.

Chart: Market overview of TradFi perpetual contracts from Nov 2 to 8, alongside key period volatility and total volume metrics for NVDA and QQQ

Gainers and Losers: Less than a quarter closed in the green

Among TradFi perpetual contracts on OKX with weekly volumes exceeding $1 million (excluding leveraged and inverse products), less than a quarter of the underlying assets posted gains last week.

Chart: Comparison of top gainers (APP, RIOT, MRNA, XIAOMI) and losers (LITE, AXTI, AAOI, SNDK) among TradFi perpetual contracts on OKX last week

· Largest Gainer: AppLovin (APP, +67.9%). Its earnings report released on November 4 showed revenue growth of 55%, alongside a new $3.2 billion share buyback program.

· Riot Platforms (RIOT, +27.0%) announced a 15-year, 910-megawatt data center lease agreement on November 4.

· Largest Loser: Lumentum (LITE, -37.5%). Impacted by a sector-wide pullback in AI optical modules, the stock plunged 18.7% in a single day on November 5.

· AXT (-31.8%), Applied Optoelectronics (-30.1%), and SanDisk (SNDK, -30.1%) also faced heavy selling pressure.

Primary Focus: Jensen Huang's Sunday

Chart: Hourly price action of OKX NVDA perpetual contracts during the weekend halt (Nov 6-8 ET) alongside summary of Nvidia board statements

While US stock markets are closed on weekends, perpetual contracts continue trading around the clock. Below is the detailed price movement of the NVDA perpetual contract on OKX (ET):

· Friday 20:00 to Sunday 15:00: Down 0.6%. The contract price mostly consolidated near $188.

· Sunday 15:00 to 19:00: Down 4.3%. The price dipped from $187.85 to $179.82, with the single hour at 15:00 seeing $9.15 million in volume, 26 times that of the previous hour.

· Sunday 20:00 Evening Session Reopens: Stock opens 3.7% lower vs Friday 20:00. Over the identical window, the perpetual contract fell 3.6%, closely aligning with the spot move. Most weekend volatility concentrated within this four-hour window on Sunday afternoon.

Nvidia has explicitly confirmed the following three points:

· On November 8, the board formed an independent committee to review reports regarding Jensen Huang.

· The board stated there is currently no reason to believe national security or Nvidia's confidential information was compromised.

· Jensen Huang expressed support for the review in a letter to employees.

This article does not endorse unverified rumors circulating online, such as claims of "espionage."

Secondary Theme: Midterm Election Week Trading

Chart: Daily closing change heatmap of TradFi perpetual contracts from Nov 2 to 6 alongside distribution of House and Senate election seats

We compared the price changes of each asset's perpetual contract at the 16:00 ET US market close against the same time window on the previous trading day:

· Election Results Day (Nov 4): Broader market up, but chip stocks weakened early. SPY perpetual contracts rose 1.6%, while NVDA fell 3.1%, and Micron (MU) dropped 6.9%.

· Nov 5: Broad-based decline. QQQ fell 6.2%, NVDA dropped 9.2%, SK Hynix slid 15.9%, and the 3x Long Semiconductor ETF (SOXL) plunged 38.5% in a single day.

· Only gold perpetual contracts maintained gains on the day (+0.9%). For the full week, gold perpetual contracts finished up 4.0%.

· Most assets rebounded on Friday, November 6, with SOXL rallying 12.1% in a single day.

Regarding election outcomes, according to NBC tallies as of November 4, the Senate currently holds 54 Democratic seats, 44 Republican seats, and 2 undecided; the House remains under Democratic majority control, with 42 seats still pending.

Exchanges and Open Interest: Volume surges 46.5%

Chart: Weekly volume comparison across major exchanges for TradFi perpetual contracts, Binance market share, and SOXL open interest changes

· Total weekly volume for TradFi perpetual contracts reached $321.5 billion, a new high since tracking began. Based on a consistent methodology covering exchanges with two consecutive weeks of data, volume rose from $217.2 billion to $318.1 billion, a 46.5% increase.

· TradFi perpetual contracts accounted for 25.0% of total cross-platform crypto market volume (spot plus derivatives), up from 18.5% the prior week.

· The busiest trading day of the week was November 5, the chip selloff date, which saw daily volume hit $90.7 billion.

· Binance captured 51.4% of total market volume (versus 53.4% last week, based on full sample exchange stats); MEXC volume grew 70%, and OKX grew 59%.

· Despite SOXL price dropping another 45% during the week, open contract volume surged 2.9 times. This open interest figure uses end-of-day data from Binance, Bybit, and OKX on November 1 and 8, estimated per unit (open interest value divided by closing price).

Note that the new positions may include hedging strategies, so they should not be entirely interpreted as one-sided long bets.

Weekend Gap: Overall Narrowing

Chart: Discount/premium distribution of perpetual contracts vs. underlying stocks for 12 US equities and ETFs at the Sunday 20:00 ET evening session reopen

At the Sunday 20:00 ET evening session reopen:

· Of the 12 tracked stocks, perpetual contracts for 8 were priced below their underlying assets.

· The median gap stands at 0.32%. The median calculation ignores signs, ranks the 12 gaps by magnitude, and averages the two middle values.

· Comparing only the 11 stocks consistently tracked across both weeks (with EWY added this week), the median gap narrowed from 0.46% last week to 0.35%.

Next Week Calendar Outlook

Chart: Core economic calendar and key watchlist assets from Nov 16 to 22 ET impacting TradFi perpetual contracts

· Tuesday, Nov 17 at 8:30: Release of US October retail sales data, the first consumption figure post-midterms.

· Tuesday, Nov 17 After Hours (16:20): Nvidia releases Q3 earnings, the first results report since the board initiated its review. Last week, the NVDA perpetual contract accumulated a 12.7% decline.

· Wednesday, Nov 18 at 14:00: Expected release of the Federal Reserve's October meeting minutes.

· Wednesday, Nov 18: According to a letter made public on November 5, three House committee chairs have requested Jensen Huang attend a closed-door briefing that day. His attendance remains unconfirmed.

The clustering of election results, the chip stock selloff, and developments surrounding Jensen Huang within a single week drove TradFi perpetual contract volume to record highs. During the Sunday US equity market closure, perpetual contracts successfully priced in the news flow ahead of schedule. Nvidia's upcoming earnings report next week will serve as the next crucial test.

TokenInsight's TradFi Weekly report updates continuously each week.