Here’s how Nvidia has traded each of the last 16 quarters
It’s been a while since then Nvidia The gains shocked the world, and even just traders.
Option pricing has overestimated the size of Nvidia’s post-report swing in six of the last seven quarters and 14 of the last 20 quarters, according to Cboe LiveVol data. Implied volatility for earnings averages 6.7%, while the average actual response is 4.6%.
Perhaps traders are wiser this time: implied volatility at the world’s largest company reached its highest level since March on Friday, lowering current expectations to 5.9% as the stock retreats this week.
This likely means higher earnings pressure for Jensen Huang’s AI giant, following the stock’s 34% decline from its March lows and an additional trillion-dollar market cap. Further exacerbating the drama, shares have fallen following the last three reports, including a 5.5% drop in February.
“They’re going to have to completely close the door on like the 50% guidance threshold for the stock to go up,” Prosper Trading Academy CEO Scott Bauer said in a phone interview. “Given the history of outstanding metrics and a stock that exploded and then sold, I’d like to sell some premium and short some.”
Nvidia, YTD
Whatever the direction, just surpassing Nvidia’s earnings could help pave the way for the next big market move. VIX SpotGamma’s Brent Kochuba noted that futures prices will likely rise through Thursday due to Nvidia earnings.
“We continue to think the post-OPEX market correction is meaningful and think the real event will be NVDA earnings tomorrow night,” Kochuba wrote to clients on Tuesday.
