Nvidia (NVDA) is set to release its second quarter earnings on Wednesday, August 28, with many on Wall Street laser-focused on the chipmaker’s results due to its influence in the tech-heavy market indexes (^GSPC, ^IXIC).
BayCrest equity derivatives managing director David Boole joins Catalysts to give insight into the market’s expectations for Nvidia earnings and the stock’s correlation to the broader market. BayCrest data found that options trading on Nvidia could move the chip stock 9.9% in either direction, with nearly $300 billion on the line for the chipmaker’s market cap.
“Nvidia is… the heaviest volume stock for options out there. There’s a lot of noise, people trade in Nvidia like it’s like it’s a proxy for the S&P [500],” Boole tells Yahoo Finance.
Boole offers trades that he is agreeable with: “So the trades that I like essentially dovetail with that view where you can sell. I like selling a $115 put that expires this Friday and selling a $140 call that expires this Friday. That’s down about 11% on the downside, up 8% if the stock goes higher. That’s a big range. That’s essentially what the options market is expecting.”
Follow along with Yahoo Finance’s latest coverage of Nvidia ahead of its earnings this week:
Why Nvidia’s stock rally is not driving broader market gains
Nvidia earnings highlight a busy end of August: What to know this week
Nvidia gets ready to take over the stock market (again)
Nvidia earnings: What the options market is anticipating
Nvidia still the best AI chip play right now: Analyst
4 AI terms Nvidia investors should know
Nvidia earnings ‘absolutely key to the AI infrastructure trade’
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Nicholas Jacobino
