How much impact does the financial report have? The options market bets that Nvidia's stock price will fluctuate by more than 10%!

Wallstreetcn
2024.05.21 02:46
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Since the beginning of this year, NVIDIA's stock price has surged by more than 80%, attracting a lot of attention from investors in related options trading. The trading volume and open interest of options have surged in the past year. However, the latest options trading data shows that some investors are starting to take a cautious stance, as the open positions of Put options betting on a decline in NVIDIA's stock price have increased

This Wednesday, "the most important stock on Earth" NVIDIA will release its first-quarter financial report. Considering NVIDIA's status as a super-weighted stock in the S&P 500 and the leader in AI, its performance trend will inevitably affect the performance of the AI sector and even the overall U.S. stock market. It is expected that this financial report may become the most important indicator in the tech field before the release of OpenAI GPT-5.

Data from the Chicago Options Exchange shows that investors are using a complex option strategy called "Straddle," simultaneously buying NVIDIA's call options and put options, betting on a significant two-way fluctuation in NVIDIA's stock price. The pricing of the Straddle option combination strategy indicates that the market expects NVIDIA's stock price to fluctuate by around 10%.

With the epic rally driven by the AI boom, NVIDIA's financial report has gradually become a key juncture in the capital market. This chip giant is not only a core beneficiary of the AI gold rush but also a basis for investors to judge the overall performance of the AI industry. Its stock price often experiences significant volatility after the financial report is released. After the last quarter's financial report was announced, NVIDIA's stock price surged by 16% in a single day, hitting a historical high.

Since the beginning of this year, NVIDIA's stock price has risen by over 80%, and related options trading has been favored by investors, with options trading volume and open interest surging over the past year. However, the latest options trading data shows that some investors are starting to take a cautious stance, increasing their holdings of Put options betting on a decline in NVIDIA's stock price.

Citigroup's stock derivative strategy strategist, Stuart Kaiser, stated in a recent report:

Option investors seem to be cautious about going long before the financial report is released.

Overall, investors remain optimistic about the recent record highs in the U.S. stock market. The Wall Street fear index VIX closed at a low of 11.99 last Friday, indicating a high market risk appetite and more concern about missing profit opportunities.

Ashwin Alankar, Global Head of Asset Allocation at Janus Henderson Investors, told the media:

Investors are more concerned about missing out on a big rally compared to experiencing a significant pullback

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