Straddles indicate potential for upside but not record highs after earnings
- Nvidia’s stock has surged in the past after reporting strong earnings.
- Options market suggests that Nvidia’s stock may not hit a new high after its upcoming earnings report.
- Straddles are priced for a $12.58 move, representing a 9.7% move at Friday’s closing price.
Investors may be hoping for Nvidia’s stock to reach new heights following its upcoming earnings report, but the options market seems to disagree. The semiconductor company has seen strong growth in the past, with its stock soaring after previous quarterly reports. However, the pricing of a ‘straddle’ strategy suggests that the odds of hitting a record high are low. Straddles are bets on the absolute value of a stock’s move after an event and are not directional. Susquehanna analyst Christopher Jacobson notes that options market skew is more to the upside, with an 8% chance of a selloff of 19% or more and an 11% chance of a rally of 19% or more.
Factuality Level: 7
Factuality Justification: The article provides accurate and objective information about Nvidia’s upcoming earnings report and discusses the options market’s perspective on potential stock movement. It includes relevant data and expert opinions to support its claims, but it does not contain any digressions or personal perspectives presented as facts.
Noise Level: 4
Noise Justification: The article provides some relevant information on Nvidia’s stock performance and options pricing, but it also includes speculative predictions based on probabilities and market trends. It lacks in-depth analysis and fails to explore the underlying reasons behind potential earnings or provide actionable insights for readers.
Public Companies: Nvidia Corp. (NVDA)
Key People: Matt Amberson (Principal at Option Research & Technology Services), Christopher Jacobson (Analyst at Susquehanna)
Financial Relevance: Yes
Financial Markets Impacted: Nvidia Corp’s stock
Financial Rating Justification: The article discusses Nvidia Corp.’s fiscal second-quarter results and the options market’s expectations for its stock performance after the earnings report, which can impact financial markets and companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
Move Size: The market move size mentioned in this article is a $12.58 move in Nvidia’s stock price, which represents a 9.7% move at Friday’s closing price.
Sector: Technology
Direction: Neutral
Magnitude: Small
Affected Instruments: Stocks
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