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watch nowVIDEO01:10Options traders brace for Nvidia earningsOptions Action
This could be the biggest report for the original king of AI in 18 months, according to options pricing around Nvidia going into its second-quarter earnings due after the bell.
The price of at-the-money options in Nvidia point to a 5.6 percent swing in the stock after its report, more than double the median post-earnings swing of the past four quarters, and what would be the biggest earnings move for the stock since its fourth-quarter 2024 report published in Feb. 2025.
Bullish calls are trading notably more expensive than puts, and the ratio of open call contracts to puts suggests traders are more actively preparing for a rally than a sell-off. The highest concentration of trading is happening in puts and calls tied to the 220 strike, where 226,000 call contracts are open versus under 80,000 puts.
“NVDA performance has been poor overall despite robust beats on earnings and guidance,” said Charlie Moon, a tech and momentum trading specialist at Prosper Trading Academy in Chicago. “I just think if there is any time NVDA is going to rip to the upside, it’ll be today.”
If Nvidia shares can rally past the $220 level, it could trigger momentum-chasing even by some of the biggest market makers, according to options positioning analysis by SpotGamma’s Brent Kochuba.
“A strong earnings call and reaction could trigger a rally as dealers are forced to buy stock to hedge their negative gamma stance above that 220 price point,” Kochuba wrote in a message to clients Tuesday morning. “That may exaggerate a move into the 230 level.”
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Nvidia, YTD
A big rally would be a big change of pace for Nvidia relative to recent earnings history. Shares have fallen after six of the last eight reports.
Still, traders are paying up for the possibility of a big win. The price of call options betting on a one standard-deviation move – contracts with a roughly 16% chance of making money – are in the 70th percentile of the past year, according to Nations Indexes data. The price of puts betting on the equivalent move to the downside are in the bottom 40th percentile.
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