Private credit bubble fears are heating up! Traders bought “bubble put options” and bet on further decline after CoreWeave (CRWV.US) fell sharply by 15%

The Zhitong Finance App learned that a key area of overnight artificial intelligence trading of US stocks was hit hard, and traders are betting that the situation may worsen further. The stock price of the so-called “new cloud” company — a company that provides GPU computing power to drive artificial intelligence in the form of a service — fell sharply because the yield on Nvidia-supported CoreWeave (CRWV.US) bonds continued to reach new highs. Britain's “Financial Times” reports that CoreWeave is targeting insurance companies for further debt financing, which clearly has not allayed market concerns.

Meanwhile, Social Capital founder Charmas Palihapitia posted on X with a screenshot showing that CoreWeave bond yields hit 15% and questioned the private credit bubble. Elon Musk replies “yikes.” CoreWeave shares plummeted 15%. Nebius Group and Iren, popular deals related to data center construction, also fell by as much as 10% at one point.

The options market also fluctuates sharply. CoreWeave options trading volume surged to more than 7 times the 30-day average, Nebius close to 4 times, and Iren to double the normal level. According to Cboe LiveVol data, Nebius and Iren traded more call options than put options, but of the two, call options were more likely to be initiated by the seller rather than the buyer. CoreWeave is the most bearish: traders bought nearly 200,000 put options, compared with 106,000 call options.

At around 10 a.m. EST, a prominent transaction occurred: someone opened 26,000 new put options with an exercise price of 37.5 US dollars and due on December 18. The transaction price was close to the seller's asking price. SpotGamma data indicates that these put options were bought. Scott Ball, CEO of Chicago's Prosper Trading Academy, said, “These are bubble put options. It's not the kind of extreme option you buy to bet on the company's return to zero. This is the center and core of AI trading, probably some kind of margin operation by someone to hedge their exposure to highly relevant stocks or even NASDAQ.”

The premium for these contracts is $0.74 each, totaling about $1.9 million, and requires CoreWeave to drop another 42% over the next two months to pay back. Prior to trading, the series of open positions was just over 1,000, indicating that this is a brand new position. CoreWeave listed for $40 per share in March 2025.

Powell added, “Maybe this is what early investors or IPO participants are saying, this is my break-even point. Maybe they can't get that kind of protection in other stocks, indices, or other products.” The above trend highlights that as the scale of AI infrastructure financing expands, the link between debt costs and equity fluctuations is strengthening.