- The options market is pointing to a 10% move in Nvidia stock after the company reports earnings.
- A move of that size would send Nvidia stock below $120 or above $140 per share.
- Implied volatility is calculated using at-the-money options straddle costs.
Nvidia stock looks poised for a big move after it reports earnings after the market close on Wednesday.
As of Wednesday afternoon, the options market is pricing in an implied move of about 10% in either direction.
Nvidia stock gained 3% to $130.82 in Wednesday’s trading session.
Such a move would shift about $300 billion in market value and send Nvidia shares plunging to $117 or soaring to $143. That would put the stock in the same range it has been trading in since June.
The last time Nvidia reported earnings, the stock experienced a three-day decline of 7% as investors readjusted the growth expectations for the company.
According to data from Bloomberg, the average analyst estimate suggests Nvidia will grow its revenue by 73% to $38.2 billion in the quarter, compared to year-ago revenue of about $20 billion.
As to which direction the stock breaks, most analysts on Wall Street see it moving higher, with the stock having an average 12-month price target of $175.
Nvidia reports earnings for the final quarter of 2024 after the closing bell on Wednesday. Tune into BI’s live blog to see if the options market was accurate in predicting how big Nvidia’s stock moves is after it reportings earnings.
The implied post-earnings move in Nvidia is calculated by taking the cost of an at-the-money options straddle and dividing that by the current stock price.
For example, based on Nvidia trading at $130.82 Wednesday afternoon, the combined cost of a Nvidia put and call with a $131 strike price expiring on Friday was $12.45.
That $12.45 divided by Nvidia’s share price of $130.82 is 9.5%.