Option Traders Target NVDA as Stock Stages Comeback

The stock boasts attractively priced premiums at the moment, too

Deputy Editor
Apr 5, 2021 at 3:10 PM
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The shares of electric vehicle maker NVIDIA Corporation (NASDAQ:NVDA) are up 1.3% to trade at $559.42, amid reports that the company could be working to solve stock-level shortage issues with its RTX 3000 graphics card by bringing back an older model. The equity is showing signs of life on the charts, ready to lock in its third-consecutive win while looking at its second close back atop long-time support at the 130-day moving average. Plus, NVDA sports a healthy 128.3% year-over-year lead, and a 6.7% rise in 2021 to boot.

NVDA Chart  3 April 5

This mostly positive price action has option traders taking notice. NVDA just landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks, with new names to the list highlighted in yellow. According to this data, 370,413 calls and 251,483 puts were exchanged over this two-week period. The most popular contract during this time was the weekly 4/1 550-strike call. 

Most Active Options April 5

Today, NVDA is seeing a similar preference for calls. So far, 73,000 calls and 37,000 puts have crossed the tape. The weekly 4/9 560-strike call is getting the most action today, closely followed by the 570-strike from the same series, with new positions being opened at both contracts. This means buyers are banking on more gains for the stock by the end of the week.

Now could be a good time to weigh in on the stock's next move with options, too. NVDA is seeing attractively priced premiums at the moment, per the security's Schaeffer's Volatility Index (SVI) of 34%, which sits in the relatively low 19th percentile of its annual range.


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