Title inspired by yesterday's option flow
Nvidia surged 3.77% on Monday, with options flow tilted towards calls. The most active call strikes this week are 950 and 920, while 850 saw the highest put volume. This disjointed strike activity is normal - market sentiment doesn't sequentially buy 925, 930, 935 etc., but instead concentrates on a further out-of-the-money strike for higher leverage. This makes the continuous call strikes seen the week of April 19th seem abnormal, reinforcing the belief it was an intentional bearish play.
While the market leans bullish, breaking 920 still has difficulty. One can continue accumulating the stock on dips, as it's likely to see upside volatility ahead of earnings. However, upside volatility doesn't negate time decay for call buyers, though this can be ignored for day-trades by those who understand options.
The title comes from the realization after reviewing Tesla's options data. The bulls didn't really put in much effort - the market still seems implicitly bearish. The good news is volume spiked in the May 31 190 calls ($TSLA 20240531 190.0 CALL$ ). The bad news is the direction was selling. Bears continue pressing at 180. The contrasting positioning between bulls and bears compared to Nvidia is striking.
Due to the post-earnings rally, calls in the 180-190 strike range saw buying last Friday. However, Monday's price action immediately poured cold water on that. But bulls aren't giving up, with more call buying in that 180-190 range on Monday, seemingly attempting a squeeze against market makers. I think that's quite difficult and maintain my view from Monday that Friday's close is likely in the 180-182.5 range.
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