3 Video Game Stories on Wall Street Today

Call buying has been popular on NVDA and EA

Mar 19, 2019 at 11:41 AM
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Digging through some of the top stories on Wall Street today, there's a lot to take in for video game lovers. Among the names making noise are chipmaker Nvidia Corporation (NASDAQ:NVDA), tech giant Alphabet Inc (NASDAQ:GOOGL), and Madden publisher Electronic Arts Inc. (NASDAQ:EA). Below we'll look at the news around the shares of NVDA, GOOGL, and EA, and the data behind the stocks.

Kicking it off with Nvidia, the company just announced it's partnering with Softbank Group to distribute cloud gaming servers throughout Japan later this year. That's on top of news the company is joining forces with Amazon Web Services (AWS) to "bring AI to millions of connected devices." NVDA stock is spiking following these updates, last seen up 3.7% at $175.18, putting it on pace for its highest close since its mid-November bear gap.

Options traders seem to be betting on more upside, with calls crossing at more than twice the expected pace. New positions are opening at the weekly 3/22 175- and 180-strike calls, which expire on Friday, as well as the weekly 3/29 180-strike calls. Call buying has been the predominant trend among Nvidia options traders in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Turning to Alphabet, Google later today is expected to reveal its cloud gaming platform. Ahead of the event, President Donald Trump mentioned Google in a tweet, saying it and other big tech companies are on the side of the Democrats.

GOOGL shares were last seen trading at $1,192.80. They've been stair-stepping higher in 2019, enjoying support along the way from the 20-day moving average. Looking at the options data, there's notable open interest at the April 1,200 call, which has seen a mix of buy-and sell-to-open activity.

As for EA, the company is preparing the release of its first "battle pass" for the popular "Apex Legends" game. Morgan Stanley weighed in this morning by raising its price target on the shares to $88 from $80, estimating "Apex Legends" will bring in $375 million in live services revenue for fiscal year 2020, with an average of 25 million monthly players.

Electronic Arts stock was last seen 1.8% lower on the day at $97.90, feeling the pressure of the 160-day moving average that has been acting as a ceiling since early February. Regardless, options traders have been bullish, evidenced by a 10-day call/put volume ratio of 4.27 at the ISE, CBOE, and PHLX -- a reading that ranks in the 80th annual percentile.

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