Earnings Preview: Cisco Systems, Inc., NVIDIA Corporation, and Tesla Motors, Inc.

Analyzing recent option activity on Cisco Systems, Inc. (CSCO), NVIDIA Corporation (NVDA), and Tesla Motors Inc (TSLA)

Feb 10, 2015 at 2:24 PM
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Among the stocks gearing up to report earnings data tomorrow after the close are networking name Cisco Systems, Inc. (NASDAQ:CSCO), chipmaker NVIDIA Corporation (NASDAQ:NVDA), and electric car issue Tesla Motors Inc (NASDAQ:TSLA). Below, we'll break down how options traders are positioning themselves, and how much speculators are willing to pay for their bets on CSCO, NVDA, and TSLA.

  • CSCO is up 1% today to reach $27.40, amid broad-market tailwinds. Looking back, the shares of Cisco Systems, Inc. have been on a tear, rebounding over 28.8% since notching an annual low of $21.27 in March. Meanwhile, sentiment in the options pits is bullish, with CSCO's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX call/put volume ratio of 2.40 ranking higher than 76% of all similar readings taken in the past year. If past is prologue, these pre-earnings bulls should feel secure with their wagers -- in the session following its last three earnings reports, CSCO has notched an average gain of 1.9%. Speculators are paying expensive prices for their short-term bets on the equity, per its Schaeffer's Volatility Index (SVI) of 38%, which sits in the 85th percentile of its annual range.

  • NVDA is up 1.5% this afternoon to hit $20.69 -- perhaps on a halo lift from fellow chipmaker Micron Technology, Inc. (NASDAQ:MU) -- adding to the shares' 28% year-over-year gain. Surprisingly, sentiment in the stock's options pits is pessimistic, with NVIDIA Corporation's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.44 sitting in the 74th percentile of its annual range. Historically, the company has moved an average of 4% in the session following its last eight earnings releases, including an 8.8% gain last August. Traders are paying fair prices for their near-term bets on NVDA, as its SVI of 43% reads in the 59th annual percentile.

  • TSLA is up about 0.6% today to $218.78, despite rumors leaking last night that Apple Inc. (NASDAQ:AAPL) may be developing a new vehicle that could compete with the electric carmaker. On the charts, the shares of Tesla Motors Inc have fallen about 25% since reaching an all-time high of $291.42 in early September -- a move that hasn't gone unnoticed by some analysts. Additionally, sentiment in the security's options pits is bearish, with TSLA's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.08 sitting just 7 percentage points away from an annual pessimistic peak. Furthermore, the equity has moved an average of 11.3% in the session following its last eight earnings releases, including a 14.5% loss in November 2013. Short-term speculators are paying middling prices for their bets on TSLA, per its SVI of 67%, which is in the 54th annual percentile.


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