This week there are essentially two potential outcomes: 1) The stock trades in the $115-$120 range, or 2) It breaks above $125. The former is more probable, the latter less so.
Last Friday, institutions chose to heavily sell calls above the $120 strike, resulting in an appearance of short squeeze potential above $120 based on open interest. If the stock were to rally through $120 on Friday, it could trigger a 5% upside burst.
However, considering Tesla is likely to be this week's main focus, I believe institutions will keep Nvidia capped below $120. The downside should also have a floor, so I'll look to sell $NVDA 20240927 110.0 PUT$ .
Notably, a large stockholder sold $NVDA 20241220 126.0 CALL$ for 12,000 contracts on Monday, suggesting Nvidia may be range-bound for an extended period.
Additionally, the bearish flows from last Friday have become more abstract, with sizeable opening interest in the $60-70 strike range. But the overall premium traded was likely just a few thousand dollars - not a typical bear put strategy, so the rationale is unclear.
Tesla should top out around $260 this week. I've already seen flows selling the $TSLA 20241011 260.0 CALL$ for around 15,000 contracts in anticipation.
Awkwardly though, the open interest support suggests a $200 floor, quite far from the $260 level. Based on technical support, a safer put sale could be at the $216 strike.
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