Straddle strategy priced for a 7.2% move in either direction
- Nvidia stock options predict a bigger-than-average move after earnings
- Straddle strategy priced for a 7.2% move in either direction
- Average one-day post-earnings move over the past 20 quarters is 6.1%
- Nvidia has beat profit expectations 19 times in the past 20 quarters
- Nvidia’s stock has gained on the day after results 14 times
The stock options market is anticipating a larger-than-average move for Nvidia’s stock after the company’s earnings report. The options strategy known as a ‘straddle’ is priced for a 7.2% move in either direction, compared to the average one-day post-earnings move of 6.1% over the past 20 quarters. This indicates that investors are expecting significant volatility in the stock. Nvidia has a strong track record of beating profit expectations and has gained on the day after results in the majority of cases. With the stock options market predicting a big move, all eyes will be on Nvidia’s earnings report.
Factuality Level: 7
Factuality Justification: The article provides information about the options market’s expectation for Nvidia’s stock movement after its earnings report. It includes data from Matt Amberson and FactSet to support the analysis. The article also mentions Nvidia’s past performance in terms of beating profit expectations and revenue forecasts. Overall, the article provides factual information with some data to back up the claims.
Noise Level: 3
Noise Justification: The article provides information about the options market’s expectations for Nvidia’s stock movement after its earnings report. It includes data on historical stock movements and the performance of Nvidia’s stock in previous quarters. However, the article lacks in-depth analysis, scientific rigor, and actionable insights. It mainly focuses on stock performance and does not explore the consequences of Nvidia’s earnings on other stakeholders or the broader market.
Financial Relevance: Yes
Financial Markets Impacted: The stock options market
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the stock options market’s anticipation of a bigger-than-average move in Nvidia Corp.’s stock in reaction to the company’s earnings report. However, there is no mention of any extreme event or its impact.
Public Companies: Nvidia Corp. (NVDA), Meta Platforms Inc. (META), S&P 500 index (SPX)
Key People: Matt Amberson (Principal at Option Research & Technology Services)
Reported publicly:
www.marketwatch.com 
