Nvidia options show traders positioned for outsized share move after earnings

NEW YORK: Traders in the US equity options market are expecting a larger-than-usual swing in Nvidia’s shares following the chipmaker’s quarterly results after the close on Wednesday (Aug 23), options market data showed.

Nvidia options imply a nearly 11 per cent swing for the shares, in either direction, by Friday, according to Trade Alert data.

A move of that magnitude would be larger than the 8.6 per cent average swing on the day after the chipmaker’s results over the last eight quarters, but still well below the 24.4 per cent jump after the last earnings report.

The stock has gained about 11 per cent in the last seven sessions, taking its year-to-date gains to about 210 per cent, and has drawn options bets on further gains.

For contracts expiring this week, Nvidia call options that would make money if the stock climbed more than 9 per cent by Friday to above $500, were the largest block of open options, with some 19,000 contracts open.

Still, some strategists cautioned against chasing further gains in the stock.

“A lot of good news is baked into this,” Steve Sosnick, chief strategist at Interactive Brokers, said.

“The stock moves on earnings but you can’t just assume it only moves up,” he said.