The Company’s segments include Graphics and Compute & Networking. Thus, if and how you build an options trade into the event comes down to whether you have a directional bias.NVIDIA Corporation is a personal computer (PC) gaming market. In sum, the options don’t seem overpriced or underpriced. Additionally, last quarter’s report saw prices jump 11% overnight. So far, prices are up $19 today, and the average daily candle range for the past two weeks is $15. It seems par for the course given the recent volatility. For instance, you wouldn’t pay $5 for a one-week at-the-money call option unless you believe the stock could move at least $5 over the next five days.Ĭurrently, the expected move for NVDA stock is $21 or 8%. The price traders are willing to pay for them implies how much volatility they expect. Otherwise, you have to look at the cost of the near-term calls and puts. Some brokers tell you the expected move outright. The options market provides an excellent picture of market expectations. You don’t have to fly into earnings completely blind. That said, if we break $220, then I’d become quite a bit more bearish. Second, we’ve seen positive responses out of the last few big players in the industry like Advanced Micro Devices (NASDAQ: AMD), Qualcomm (NASDAQ: QCOM) and Taiwan Semiconductor (NYSE: TSM).
First, NVDA enters the event well off its highs, so we’ve already seen the stock punished. While it’s always a crapshoot guessing the direction of the earnings gap, I think the odds are against a significant decline. Source: The thinkorswim® platform from TD Ameritrade
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