By Nvidia stock looks poised for a big move after it reports earnings after the market close on Wednesday.
As of Wednesday afternoon, the options market is pricing in an implied move of about 10% in either direction.
Nvidia stock gained 3% to $130.82 in Wednesday’s trading session.
Such a move would shift about $300 billion in market value and send Nvidia shares plunging to $117 or soaring to $143. That would put the stock in the same range it has been trading in since June.
The last time Nvidia reported earnings, the stock experienced a three-day decline of 7% as investors readjusted the growth expectations for the company.
According to data from Bloomberg, the average analyst estimate suggests Nvidia will grow its revenue by 73% to $38.2 billion in the quarter, compared to year-ago revenue of about $20 billion.
As to which direction the stock breaks, most analysts on Wall Street see it moving higher, with the stock having an average 12-month price target of $175.
Tune in here to see if the options market was accurate in predicting how big Nvidia’s stock moves is after it reportings earnings.
The implied post-earnings move in Nvidia is calculated by taking the cost of an at-the-money options straddle and dividing that by the current stock price.
For example, based on Nvidia trading at $130.82 Wednesday afternoon, the combined cost of a Nvidia put and call with a $131 strike price expiring on Friday was $12.45.
That $12.45 divided by Nvidia’s share price of $130.82 is 9.5%.
