Nvidia Option Traders Pile on Bullish Calls Ahead of Earnings
$NVIDIA(NVDA.US$ option traders are piling on bullish call options ahead of earnings, with analysts expecting the biggest beneficiary of increasing investments in artificial intelligence to deliver results that will blow past estimates.
The chipmaker that powers generative AI has seen its stock triple in the past year as the company's financial results blew past estimates. In its fiscal fourth quarter that ended Jan. 31, revenue reached $22.1 billion, exceeding estimates by $1.7 billion, amid soaring demand. For the three months ended April 30, Nvidia is expected to report revenue of $24.6 billion, according to estimates compiled by Capital IQ.
Investors have been pricing in surging revenue for Nvidia, sending shares climbing and raising the bar for a positive reaction to the financial results. A revenue beat of at least $1.5 billion is necessary to keep the stock from falling after the results are released, MarketWatch reported, quoting Susquehanna analyst Chris Roland's note to clients Monday.
About 15,920 call options that give the holders the right to buy Nvidia shares at $950 were traded as of 12:12 p.m. in New York Monday, surpassing the open interest which totaled 9,350 contracts. Volume on that contract has been rising since last week as investors price in expectations that the stock rally could continue.
At 11:02:00 a.m. in New York, two block trades were posted including one where the buyer paid a premium of $5.63 million for call options that give the holder the right to buy 100,000 Nvidia shares by June 21 for $960 each. At that exact time, another block trade was posted where the seller stands to collect a premium of $3.37 million for writing call options that give the holder the right to buy the same amount of Nvidia shares for $1,020 each with the same expiration.
Another two block trades were posted at 11:04:14 a.m. Monday, including one where the buyer paid a premium of $8.1 million for call options that give the holder the right to buy 100,000 Nvidia shares by July 19 at $940 each. The other block trade involved the buyer paying a premium of $6.7 million for put options that give the holder the right to sell 100,000 Nvidia shares at $940 each also by July 19.
But after the stock's 91% rally since the start of the year to $945.70, nine of the 15 technical indicators tracked by moomoo are showing that Nvidia is overbought and could reverse course and turn bearish.
But after the stock's 91% rally since the start of the year to $945.70, nine of the 15 technical indicators tracked by moomoo are showing that Nvidia is overbought and could reverse course and turn bearish.
But that bearish trend isn't showing up in the capital trend. as of 12:17 p.m. in New York, the stock has seen a $584 million in net inflows, with money coming from small and big investors, according to data tracked by moomoo.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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Salimda : Will go up by 10% after earnings tomorrow
Bullish Law : Bull trend for NVDA