Last week, institutions hedged TSLA by selling $340 calls, targeting a range of $340-$375. With Friday's close at $320, they successfully positioned below $340.
This week's hedge strikes are at $330, targeting a $330-$360 range, suggesting they don't expect TSLA to exceed last week's highs:
Sell $TSLA 20241122 330.0 CALL$
Buy $TSLA 20241122 360.0 CALL$
Earnings may be somewhat muted this week. Last Thursday, institutional option blocks started positioning for NVDA earnings, with early strikes targeting $160+. But after Friday's market weakness, later entries lowered expectations to $150.
First, the weekly institutional roll showed hedges assuming NVDA stays below $150 this week, with a $150-$162.5 range:
Sell $NVDA 20241122 150.0 CALL$
Buy $NVDA 20241122 162.5 CALL$
Then we had the second wave of entries with various strategies - debit spreads, rolls, and a large unwind:
Stealth $140/$150 call spread entry:
Buy $NVDA 20241220 140.0 CALL$ 20,000 contracts
Sell $NVDA 20241220 150.0 CALL$ 20,000 contracts
No clear institutional footprint, just large volume prints. Very low-profile entry, potentially revealing this week's expected outcome.
Crowd roll up to $170 calls:
Close $NVDA 20241220 160.0 CALL$
Open $NVDA 20250117 170.0 CALL$
Based on previous COIN experience, this roll is fairly neutral, more indicative of positioning for a higher IV environment pre-earnings before an expected decay.
The $200M trader reduced:
They sold 26k and 17.5k of the $NVDA 20241220 135.0 CALL$ on Thursday/Friday, leaving ~124k remaining.
At their $18 cost basis, the $135 calls need $153 to break-even. Considering elevated IV before earnings, taking some profits ahead of an expected drop in volatility around $150 makes sense.
The initial read is bullish for earnings with opportunity to sell volatility. Let's see what positioning the next wave brings tomorrow.
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