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)

by Griffin Kruse

Published on Feb 10, 2015 at 2:24 PM
Updated on Apr 20, 2015 at 5:32 PM

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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