In Case You Haven’t Heard, NVDA Announces Earnings After the Bell Today

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I say this rather facetiously, because from the morning broadcast to even now, (likely after the closing bell is when you are reading this) all the talk is the anticipation, OR by now the earnings number of NVIDIA Corporation (NVDA).

AI and AI stock have been all the rage for a big chunk of this year. It seems like all a company had to do was slap on AI to its corporate name and that had some pull with investors and those stock prices were shooting up to the high heavens.

In the last quarter there was a bit of a sector rotation out of those stocks and that brought out market commentators wondering if AI is going to be just like any other ‘bubble’ like the internet boon or the tulip  mania many years back.

It is possible their could be a bust type situation in AI stocks, but with NVDA announcing (or having announced by now) we will see if this global leading semiconductor chip company who is leading innovation in AI with their products and services has done well, is doing well, and has staying power.

Markets in Focus — Invesco QQQ Trust (QQQ)

I placed both ETF charts on this page to whow they are a) very similar and b) to see a before shot of each prior to NVDA announceing their earnings so when you see the after shot you can see how much of an effect this stock has on its sectors and potentially the market overall.

Tools and Observations

I am curious.

Unless any of you have taken an options education course on how to trade options at on or around earnings, I am an advocate of one NOT holing an options trade over earnings.

Therefor I am NOT showing you this data as a recommendation to take an option trade (nor the stock itself) on NVIDIA Corporation (NVDA).

I want to look at the options chain though, going into the earnings as a means to see what happens to the option post the earnings announcement.

NVDA announces after the closing bell today so we wont have info of what it did post the earnings announcement in this educational article for you, but you can see the images of what they are at the time of this writing and then observe the effects ater the fact.

Plenty of after market activity is going to take place between todays close and tomorrow, but for education let me point out something.

We can guage the anticipated amount of a price move in the underlying prior to an earnings announcement by looking at the short-term/ current monoth options expiration for the At the Money (ATM) calls.

Here is the image:

I am looking at the natural third Friday expiration for Sept. which is the 13th.

I am looking at the ATM strike which I deem is the 126 strike for both the call and the put option.

When I add the two together that totals $17.75.

That normally wouldn’t seem too far fetched of an expected post earnings announcement stock price move for NVDA, but since it is post-split maybe? It seems a bit much?

We will obvously see what happens.

Note that price move amount is for an anticipated move either higher or lower.

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