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Options Traders Await Nvidia’s Earnings Report

So far, Nvidia’s stocks have been on an upward trajectory, experiencing a remarkable 50% increase in value, and as the company’s upcoming earnings report approaches, investors are eagerly awaiting to gauge the tech giant’s performance.

Let’s remark that Nvidia recently surpassed Google-parent Alphabet to become the third most valuable U.S. company, and with this newfound status, expectations are soaring for Nvidia to deliver a robust earnings report, which could potentially lead to a surge in its stock price. Analysts have high hopes, projecting earnings of $4.56 per share and revenue of around $20.378 billion for this quarter, compared to $6.05 billion a year ago, according to data from LSEG.

However, despite the bullish sentiment surrounding Nvidia’s earnings, it is essential to acknowledge the potential downside risks. Currently, market data suggests that the anticipated swing in Nvidia’s stock price could be as high as 11% in either direction post-announcement, surpassing the typical fluctuations observed after previous earnings reports. This means big opportunities for options traders to plan their moves and potentially make some money in the midst of all the excitement.

Nvidia’s estimated substantial market capitalization is at $1.8 trillion, thus, even a slight shift in its stock price could have far-reaching implications. To illustrate, a small movement in the stock price could result in a significant change in Nvidia’s overall worth, to be exact, it can increase or decrease by about $200 billion – that is more than the value of big-name companies like Intel Corp and beats out most of the companies on the S&P 500 index, and such a move would undoubtedly send ripples across the options market.

As of February 15, the excitement was evident among options traders as over 750,000 Nvidia options were traded, and although the stock prices are relatively high, investors are still keen on betting that Nvidia’s stocks will rise. This is shown by something called the “call skew”, which is currently near a five-year high. Nonetheless, as mentioned previously, traders should still consider the posibility for Nvidia’s stock price declining.

In conclusion, whether bullish or bearish, options traders could take advantage on the anticipated volatility surrounding Nvidia’s earnings report, and with careful planning and strategic execution, they stand ready to potentially profit from the resulting fluctuations in the tech giant’s stock price.

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