To The Moon

We have the Top 3 daily active stock options and we have Nvidia (NVDA) who has reported a better-than-expected results, but yet the share fell.

$Tesla Motors(TSLA)$ shares rose by 2.38%, closing at $241.20. Its options trading volume is 2.23 million. Call contracts account for 56.6% of the whole trading volume.

$Petroleo Brasileiro SA Petrobras(PBR)$ shares fell by 1.55%, closing at $15.85. Its options trading volume is 1.31 million. Call contracts account for 97.6% of the whole trading volume.

$NVIDIA Corp(NVDA)$ shares fell by 0.92%, closing at $499.44. Its options trading volume is 1.03 million. Call contracts account for 58.0% of the whole trading volume.

Nvidia (NVDA) Current Skew Indicator Show Slightly Bullish Signal

Nvidia shares moved down 1% in extended trading on 21 Nov 2023 (Tuesday) after the chipmaker reported fiscal third-quarter results that surpassed market expectations.

But Nvidia did called for a negative impact in the next quarter because of export restrictions affecting sales to organizations in China and other countries.

Nvidia expect their sales to destinations affected by export restrictions to decline significantly in the fiscal Q4 2024, even though their strong growth in other regions could offset the decline brought by the restriction.

Nvidia has mentioned in their conference call that they are working with some clients in the Middle East and China to obtain U.S. government licenses for sales of high-performance products. Nvidia is trying to develop new data center products that comply with government policies and don't require licenses, but these might not be meaningful in the fiscal fourth quarter.

Nvidia (NVDA) 30-day Implied Volatilty

If we looked at how option call volume have build up before market close, there is still optimism for Nvidia to do better in today’s trading.

Despite the highlight of a decline in their fiscal 4th quarter, I believe Nvidia sales growth in other region should be able to cover these declines. There might be a chance that the export restrictions will be removed if US-China relationship improved because of benefits take precedence rather than political.

Nvidia (NVDA) Volatility Skew

Volatility skew is a measure of market implied volatility to both the upside and the downside, and the comparison of how they relate to each other.

As we can see that the implied volatility for downside puts is decreasing relative to upside calls, this suggests that the market is pricing in a larger confidence to an upside move.

The following chart show us that the indicator is predicting a slightly bullish signal for Nvidia.

Tesla (TSLA) Current Skew Indicator Show Slightly Bullish Signal

Tesla's plans in India have reignited, with the company discussing billions of dollars worth of investment in the country.

More details about Tesla's investment proposal in India were released. According to Bloomberg, Tesla is allegedly planning to invest about $2 billion initially on a new plant in India.

In addition, Tesla has plans to buy $15 billion worth of auto parts from India. Tesla is also mulling over the idea of producing batteries in India to reduce costs. Tesla India gains new legs as government considers reducing import tariffs

Tesla (TSLA) Volatility Skew

The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls.

As we can see that the implied volatility for downside puts is decreasing relative to upside calls, this suggests that the market is pricing in a larger confidence to an upside move.

The following chart show us that the indicator is predicting a slightly bullish signal for Tesla.

Summary

Based on what we see from the Top 3 Daily Active Stock Options, Nvidia and Tesla are still showing potential slight bullish upside from how the options are trading.

I would expect Nvidia to make a recovery in its share price when trading starts today (22 Nov) and Tesla should have a continued upside move.

Appreciate if you could share your thoughts in the comment section whether you think both Nvidia and Tesla would lead the tech stocks today (22 Nov 2023)?

@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.