NVIDIA Corporation (NASDAQ:NVDA) stock turned in its best week since July last week, capitalizing on Intel's (INTC) controversial chip issues. Then, at the Consumer Electronics Show (CES) this weekend, NVIDIA announced it is partnering with Uber, Volkswagen, and Baidu, to provide graphics chips for artificial intelligence (AI) in driverless cars. The big news has NVDA stock up another 2.7% to trade at $221.18 this morning, and fresh off a new record high of $222.03.
The chip stock has tacked on 115% year-over-year, and its December pullback was contained by its rising 100-day moving average. As such, NVDA calls continue to be popular in the options pits. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVDA's 10-day call/put volume ratio of 1.85 sits 4 percentage points from an an annual high. In other words, options buyers have rarely picked up NVDA calls over puts at a faster clip during the past 12 months.
Meanwhile, the stock sports a Schaeffer's Volatility Scorecard (SVS) of 95, indicating NVDA shares have handily exceeded options traders' volatility expectations in the past year -- another boon for would-be premium buyers. Plus, the security's Schaeffer's Volatility Index (SVI) of 30% is in just the 7th percentile of its annual range, pointing to relatively muted volatility expectations priced into NVDA's short-term options.
In fact, since 2008, there have been seven times when Nvidia stock was trading near a 52-week high and simultaneously sported a low SVI. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, NVDA averaged a one-month gain of 2.59% after these options signals.