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Nvidia, up about 50% this year, could see its shares swing by
about 11% in either direction following its quarterly results on
Feb. 21, according to data from options analytics service ORATS.
That's the largest expected move options traders have priced in
ahead of Nvidia's earnings over the last three years and well
above the stock's actual average earnings move of 6.7% over that
period, ORATS founder Matt Amberson said.
With Nvidia's market capitalization at $1.8 trillion, a move of
that size would make for a potential swing in market value of
about $200 billion. That would be greater than the market
capitalization of chipmaker Intel Corp and larger than the
respective market values of about 90% of S&P 500 constituents.
On Thursday, more than 750,000 Nvidia options had changed hands
by 1 p.m. (1800 GMT), making it the second most actively traded
single stock name in the options market.
Despite the sizeable run-up in the stock, demand for upside
options bets on Nvidia remained intact, with one measure of
sentiment - the stock's 90-day 25 delta call skew - near a five-
year high, according to a Susquehanna analysis.
"The elevated call skew tells us that investors still see the
potential for significant upside despite the move already made
and that there is significant demand for upside exposure as some
who may be fearful of the high volatility turn to upside calls
for lower-risk exposure," Christopher Jacobson, a strategist at
Susquehanna Financial Group, said.
On Wednesday, Nvidia overtook Google-parent Alphabet as the
third most valuable U.S. company.
Nvidia is expected to post earnings of $4.56 a share, and a rise
in quarterly revenue to $20.378 billion from $6.05 billion a
year ago, according to the mean estimate from 33 analysts, based
on LSEG data.
(Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and
Leslie Adler)
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