All Eyes Peeled to NVDA and their Earnings Due After Market

Tom Gentile

Posted in

By: Tom Gentile
February 28th, 2024

3 mins read

Originally published via our newsletter previously. Subscribe for early access!

I do not have a crystal ball. Nor a Magic 8-Ball. I don’t have a bunch of tea leaves or astronomical charts to help gauge whether or not NVS will beat or miss their expected earnings report today after the close of market.

I have no idea what they will offer by way of company guidance on earnings in the next or future quarters.

I can’t tell you if they will have new products or services nor do I even dare guess how NVDA is going to shape the world with their innovations with AI.

When it comes to the potential price or percentage of their stock price pop or drop in price I DO have a way to run analysis on the options data to see what the market makers are pricing in for that potential price move on the earnings announcement.

I teach this way to do the analysis in the ‘Tools and Observations’ section of this weeks’ newsletter.

Market in Focus XLK – Technology Select Sector SPDR Fund (XLK)

I know we highlighted this chart last week, but with NVDA due out today after the close it is worth it to highlight it again.

NVDA Earnings
NVDA Earnings

Not that NVDA is the sole catalyst for the XLK (or for the markets overall), but the fact it is a tech giant what they say about their future earnings per share and revenue guidance, more so than just the announced numbers, can make or break what happens to NVDA.

What NVDA says about their future outlook could affect what investors feel about other stocks in the same industry / sector.

If they go up or down in sympathy with NVDA will be seen in their charts and as I see it, in the chart of the XLK.

Tools and Observations

I have shown this exercise in the past. The exercise of assessing how much a security could pop or drop upon their earnings announcement.

The process is to look at the next month out standard third Friday expiration and to look at the ‘At the Money’ strike priced options.

One is to add the two premiums together and that is the market makers way of showing the anticipated price move in the security.

NVIDIA Corporation, (NADSAQ: NVDA) reports earnings today after the bell.

We are not looking at what the actual number is, what they forecast for future eps and revenues. This exercise is done to assess the price of opening up a straddle on NVDA.

It is then up to you if you want to actually pursue this as an actual trade (to be discussed between you and your broker).

If you feel the stock can pop higher or lower the straddle cost after earnings are announced AND you feel it could exceed the cost of the straddle to be ‘In the Money’ for the calls or the puts enough to be profitable so one can close the trade the next day after the announcement.

At the time of this writing NVDA is trading at $666.10 and the March $

Image 3

The combined cost for both legs, which constitutes the trade, is $86.65 or $8,665 per contract.

The current price of NVDA is 666.10 so the $86.65 equates to 13% of the stock price.

If you look at the risk graph for this straddle you also see the light blue lines indicating the breakeven or the price level higher or lower to break even on the trade, (light blue, horizontal lines).

Image 4

It’s possible more profits are attainable the more NVDA’s price exceeds those break evens higher or lower.

Tom Gentile
C1P: Chief 1-Percenter


Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.

Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.

This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.

You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any investment decision made or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.

Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.

Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.

A full disclaimer can be found here:

Sign Up Now for Free Education!