Options Bulls Blast Nvidia Stock Despite Crytpo Concerns

Options volume is running at double the intraday average

Digital Content Manager
Feb 17, 2022 at 12:14 PM
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Nvidia Corporation (NASDAQ:NVDA) is taking a hit today, despite the semiconductor name posting better-than-expected fourth-quarter earnings and revenue, as well as an upbeat current-quarter forecast. The company is betting on strong demand for its data centers, but investors are still worried about flat profit margins and exposure to the crypto market. At last check, NVDA is down 6.4% to trade at $246.89.

Those concerns have not deterred Mizuho, which chimed in with a price-target hike to $345 from $335. This is made more noteworthy by the fact that analysts were already bullish towards NVDA, with 22 of 24 in question rating it a "buy" or better. Plus, the 12-month consensus target price of $341.06 is a substantial 38.2% premium to current levels.

Options traders have not been scared to jump right in, either. So far, 422,000 calls and  259,000 puts have crossed the tape, which is double the intraday average. Most popular is the February 250 call, followed by the 250 put in the same series, with new positions being opened at both. 

It seems like this penchant for calls has been the norm lately. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.87 ranks in the 2nd percentile of its annual range. This means short-term option players have rarely been more call-heavy during the past 12 months.

Those options buyers are in luck. NVDA's Schaeffer's Volatility Scorecard (SVS) sits at 96 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year.

It's also worth remembering that Nvidia stock is one of the best chip stocks to own in February, making now the perfect opportunity to buy the dip. Shares have cooled from a Nov. 22, all-time high of $346.47, but have gained back support from the 180-day moving average, after briefly slipping below this trendline last month. Over the last nine months, NVDA has added 70.4%.

NVDA 180 Day

 




 
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