Nvidia options traders prepare for a massive share surge as earnings approach.

Nvidia options traders prepare for a massive share surge as earnings approach.

NEW YORK: Investors in the U.S. equity options market are placing bets that a significant move in the shares of the leading artificial intelligence chipmaker in the world may result from Nvidia's impending earnings announcement. output

Following its quarterly reports on February 21, Nvidia, which has seen a 50% increase in shares this year, might experience an 11% swing in either direction, according to data from options analytics tool ORATS. According to Matt Amberson, the inventor of ORATS, that is the biggest predicted move that options traders have priced in ahead of Nvidia's earnings over the last three years and significantly higher than the stock's actual average earnings move of 6.7% over that time.

Given Nvidia's $1.8 trillion market capitalization, such a change might result in a $200 billion potential swing in the company's market value. That would be more than the chipmaker Intel Corp.'s market capitalization and more than the respective market values of around 90% of the S&P 500 members.

As of 1 p.m. (1800 GMT) on Thursday, Nvidia options had exchanged hands over 750,000 times, making it the second most actively traded single stock name worldwide.

Demand for upside options bets on Nvidia persisted despite the stock's significant run-up, with one sentiment indicator—the stock's 90-day 25 delta call skew—nearing a five-year high, per a Susquehanna research.

"The elevated call skew indicates that investors, who may be wary of the high volatility, are shifting to upside calls for lower-risk exposure, indicating that they still see significant upside potential despite the move already made," said Christopher Jacobson, a strategist at Susquehanna Financial Group.

As the third-most valuable American firm as of Wednesday, Nvidia surpassed Alphabet, the parent company of Google.

Using LSEG data as a basis, the mean estimate from 33 analysts projects that Nvidia will report profits per share of $4.56 and quarterly revenue of $20.378 billion, up from $6.05 billion a year earlier. output