Nelson made the gesture during the Magic's 128-125 loss in triple overtime to the Chicago Bulls on Wednesday.
With 11.2 seconds left in the fourth quarter, Nelson nailed a jumper over Bulls center Joakim Noah tying the score at 101.
Going back to the bench after a Chicago timeout, Nelson cupped his hands in front of his groin area in the same way former NBA player Sam Cassell used to.
He is the second player to be fined for the dance. Milwaukee Bucks forward Caron Butler was also fined for doing the gesture on November 6.