The Set-Up

Nvidia (NVDA) reports earnings after the close. The options market is pricing in about a 5% move between now and Friday’s close (via Options AI):

Here’s how that compares to the previous 3 earnings moves via the Options AI earnings calendar. The company beat EPS estimates each time, the stock moved higher each time, with an average overall move of 3.3% its biggest move 7%, and its last earnings essentially unchanged:

You can see how the stock set up into, and reacted after those earnings.

Example Trades

Neutral – First, a look at a condor based on the expected move. With the stock $538:

This +510p/-512.5p/-565c/+567.5c condor sets its strikes at the expected move for this Friday’s expiration. A move beyond the 5% expected move and this trade loses money, anything inside that it makes money. Max profit is between $512.50 and $565.00

Bullish – Here’s a trade comparison based on a price target at the bullish consensus (stock reference $537, bullish consensus $562)

The +535/-562.50 call spread comes in and just under $10 with about $17.50 in potential profit if the stock is at or above 562.50 on Friday’s close. The “selling to the bears” bullish credit put spread -535p/+510p risks about 16 to make 9 but any close above 535 on Friday and it is at max profit.

Bearish – Here’s a trade comparison based on a price target at the bearish consensus (stock reference $539, bearish consensus $514)

The +540/-515 debit put spread  risks under $10 to make up to $15 with a max gain below $515 in the stock and a breakeven near $530. The credit call spread risks $15 to make $8 with a max gain anywhere below $540 in the stock.

See Upcoming Moves

Compare Moves

Open an account

Learn more about Options AI and apply for an account.

Learn More