Options Traders Bearish Before Typically Strong Month for Nvidia

Nvidia will try to break out again in August

by Josh Selway

Published on Jul 29, 2019 at 1:24 PM
Updated on Jun 24, 2020 at 10:16 AM

Nvidia Corporation (NASDAQ:NVDA) is trying to break out, recently taking out its 200-day moving average and now could be set to test the $180-$190 region that's home to the shares' April highs and a bear gap from last November. Just going by seasonal data, it may be wise to think NVDA stock could keep pushing higher in the short term.

For instance, the semiconductor name landed on a list from Schaeffer's Senior Quantitative Analyst Rocky White showing the best stocks in August from the past decade. During this time, Nvidia has ended the month in positive territory 90% of the time, and has averaged a gain of 6.6%. That's good enough for the second best return of all the S&P stocks we looked at.

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Right now the options data for NVDA traders suggests they could be taking a bearish approach. This is according to the Schaeffer's put/call open interest ratio (SOIR) of 1.03, which has an annual percentile rank of 90 -- showing such a put-heavy reading is very rare. Looking at specific contracts that expire within the next three months, the September 165 put is home to notable open interest.

In just the past 10 days in particular, the weekly 8/2 170- and 172.50-strike puts saw heavy action. This series is popular today, too, but on the call side, where the 172.50- and 175-calls are seeing new positions opened. Overall it's a low-volume session, however, with options volume running in just the 15th annual percentile. Nvidia shares were last quoted at $174.12.


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