Is Nvidia the New Tesla? Options Traders Place Their Bets

The Wall Street Journal2023-08-22

Investors are wagering that the furious rally in Nvidia shares will continue after Wednesday’s earnings reportEMIL LENDOF/THE WALL STREET JOURNALTraders are ramping up their bets that the blockbuster ...

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Options Traders Place Their Bets\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-22 17:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.wsj.com/finance/stocks/is-nvidia-the-new-tesla-options-traders-place-their-bets-7f0a37c8><strong>The Wall Street Journal</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors are wagering that the furious rally in Nvidia shares will continue after Wednesday’s earnings reportEMIL LENDOF/THE WALL STREET JOURNALTraders are ramping up their bets that the blockbuster ...</p>\n\n<a href=\"https://www.wsj.com/finance/stocks/is-nvidia-the-new-tesla-options-traders-place-their-bets-7f0a37c8\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0417517546.SGD","symbol_name":"Allianz US Equity Cl AT Acc SGD","start_time":0,"source_url":"https://www.wsj.com/finance/stocks/is-nvidia-the-new-tesla-options-traders-place-their-bets-7f0a37c8","article_id":"2361040655","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2361040655","pubTimestamp":1692698264,"sourceInfo":{"source_id":"wsj_highlight","name":"The Wall Street Journal"},"weMediaInfo":null,"summary":"Investors are wagering that the furious rally in Nvidia shares will continue after Wednesday’s earnings reportEMIL LENDOF/THE WALL STREET JOURNALTraders are ramping up their bets that the blockbuster ","collect":0,"end_time":0,"defaultTopTitle":"wsj.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","BK4559":"巴菲特持仓","BK4543":"AI","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","TSLA":"特斯拉","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","LU2265009873.SGD":"Eastspring Investments - Global Growth Equity AS SGD-H","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0310799852.SGD":"FTIF - Templeton Global Equity Income A MDIS SGD","BK4581":"高盛持仓","LU0109392836.USD":"富兰克林科技股A","LU2063271972.USD":"富兰克林创新领域基金","NVDA":"英伟达","LU1242518931.SGD":"Fullerton Lux Funds - Asia Absolute Alpha A Acc SGD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU0672654240.SGD":"FTIF - Franklin US Opportunities A Acc SGD-H1","LU0444971666.USD":"天利全球科技基金","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","BK4567":"ESG概念","LU2286300806.USD":"Allianz Cyber Security AT Acc USD","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","BK4507":"流媒体概念","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","BK4555":"新能源车","BK4566":"资本集团","BK4525":"远程办公概念","LU1267930730.SGD":"富兰克林美国机遇基金AS Acc SGD (CPF)"},"translate_title":"英伟达是新的特斯拉吗？期权交易者下注","themeId":"c6bc5cea51b34b69a5c11356243f3324","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSLA":1.1,"NVDA":1.1},"content_text":"Investors are wagering that the furious rally in Nvidia shares will continue after Wednesday’s earnings reportEMIL LENDOF/THE WALL STREET JOURNALTraders are ramping up their bets that the blockbuster rally in Nvidia’s shares will accelerate after Wednesday’s earnings report.Riding the frenzy of interest in artificial-intelligence technology, they have dished out more than $100 billion on Nvidia options this year, according to Cboe Global Markets data through mid-August. About 60% of that sum is tied to call options that can be used to bet on a continued rally. No other stock besides Tesla has garnered that level of investor interest.Options are contracts that give investors the right to buy or sell shares at a specific price, by a specific date. Calls confer the right to buy, while puts give the right to sell.Shares of Nvidia, which makes the graphics chips used to power generative AI technology, popped 8.5% Monday and have more than tripled this year, making them by far the best performers in the S&P 500. The rally went into overdrive three months ago when the company astonished Wall Street with a revenue forecast that blew past estimates.Nvidia gained nearly $184 billion in market value on May 25, the day after its last earnings report, and helped spark a monthslong rally in other AI-related stocks that propelled the broader stock market’s ascent. The S&P 500 is up 15% in 2023, despite pulling back around 4% in August.The activity in the options market has hit a fever pitch ahead of the next earnings report, which is due after Wednesday’s closing bell. The number of call option contracts outstanding hit a high in August, Cboe data shows. Some of the most actively traded contracts on Monday were those that would profit if the shares kept climbing, touching $500, Cboe Global Markets data show. Some traders eyed calls tied to the shares jumping to $600 or $700. Following the report, traders are betting on a swing in the stock of about 11%—up or down—through the end of the week, options pricing shows. That is well above the average move of about 7% seen after the last eight earnings releases, according to Dow Jones Market Data. The robust activity suggests some traders are fearful of missing out on further gains in Nvidia, while others are likely eager to take advantage of the big one-day moves in its shares. “This name in particular is full of FOMO, and people do not want to miss out on it,” said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. Likewise, the 50 investment analysts covering the stock are mostly bullish, according to data compiled by FactSet. Their average price target is around $535, 14% above Monday’s close of $469.67. Warren Lau at Aletheia Capital, the most optimistic of the bunch, recently boosted his target to $1,000, FactSet data show. The stakes are undoubtedly high heading into Wednesday’s report. Nvidia’s earnings serve as a test for the company’s bulls as well as other stocks that have benefited from the excitement around AI. For example, Google parent Alphabet has rallied more than 45% this year, in part on that optimism. The stock market is also in need of a fresh catalyst after stumbling in August on worries about the impact of higher bond yields on richly valued technology shares. Through July, Nvidia alone had powered more than 10% of the S&P 500’s gains, according to S&P Dow Jones Indices. Some of the most popular options trades tied to Nvidia are those expiring within days, a sign that traders are looking to pocket quick profits. Interest in one-day options bets has exploded this year, with trading volumes hitting a record this month, according to Nomura.To some, the Nvidia bets are reminiscent of the mania in Tesla options. Elon Musk’s electric carmaker has a cultlike following among some investors who helped power the stock to repeated highs in recent years. Many used options to ride that momentum and try to profit from bigger gains ahead. Tesla options turned into one of the biggest casinos in financial markets. “It reminds me of what people were doing in Tesla,” said Danny Kirsch, head of options at Piper Sandler. “You can make 10 times your money in a day.”","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":10,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2361040655"}