NVIDIA Corporation (NVDA) Trader Places Huge Bet on Higher Highs

NVIDIA Corporation (NASDAQ:NVDA) just touched a seven-year high, prompting one trader to initiated a long call spread

Oct 14, 2015 at 2:08 PM
facebook X logo linkedin


NVIDIA Corporation (NASDAQ:NVDA) is fresh off a seven-year high of $27.78, even after Roth Capital re-assigned coverage of the stock to a new analyst, who promptly slapped it with a "neutral" rating and $26 price target. At last check, the shares have rallied 3.2% at $27.24, prompting an uptick in bullish options activity.

For starters, NVDA calls are crossing the tape at quadruple the expected intraday rate. According to Trade-Alert, one long-term speculator is initiating a 10,000-contract bull call spread at the January 2016 30- and 32-strike calls, anticipating the shares will surge to $32 by January expiration -- putting them in territory not explored since January 2008.

Not everyone's so optimistic. Buy-to-open activity is also detected at the out-of-the-money November 26 put, suggesting another set of traders thinks NVDA will breach the underfoot strike by the close on Friday, Nov. 20 -- when the back-month series expires.

Historically speaking, put buyers have been busy in recent weeks. NVDA's 10-day put/call volume ratio of 0.99 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks near the top quartile of its annual range. In other words, traders have bought to open puts over calls at a faster-than-usual rate. Of course, given the stock's 36% year-to-date upswing, some of these long puts may be protective in nature.

Elsewhere, short sellers and analysts are bearish toward NVIDIA Corporation (NASDAQ:NVDA). Almost 7% of the stock's float is sold short -- suggesting there's plenty of sideline cash available for a short-covering rally -- and 65% of analysts consider the equity a "hold" or worse, leaving room for future upgrades.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI