👀 Volatility Watch: NVDA's November 15th Options Underpriced—Here’s How to Profit

NVIDIA Corporation (NVDA), the popular AI juggernaut, is always trending in the news and on social media. NVIDIA Corporation (NVDA), the popular AI juggernaut, is always trending in the news and on social media. During the last 2 years options investors have consistently underestimated the size of NVDA moves. That is great news for option buyers! There are many potential catalysts that could cause the stock to make a bigger-than-expected move before November 15th. Recently, investors were worried that NVDA would not be able to keep up with the extremely high demand for their new Blackwell chips. Yesterday the company gave assurance that their production capacity for the new chip will be okay. The stock finished up 2.43% on the day. This morning, headlines are talking about government restrictions on selling chips to China and other countries that represent national security risks. As of this writing, the stock is down nearly 1% in pre-open trading. Good or bad news can be a potential catalyst any day. [Get great trades every day--Click here]( [This Volatility Term StructureÂ]( chart for NVDA shows us the implied volatility for the at-the-money options for each expiration. This chart shows that options expiring November 15th have lower volatility expectations compared to all later terms. Then after that November 15th term, there is a spike in volatility expectations due to the uncertainty surrounding the scheduled earnings report on November 20th. While NVDA certainly does make big moves around earnings reports, the stock absolutely does NOT need an earnings report to make a bigger-that-expected move. [This MDM graphÂ]( compares the modeled expected distribution for future stock prices (the orange line) with the actual distribution of NVDA’s share prices over the past 2 years (the blue histogram). You can see that the actual stock movement shows that NVDA tends to make big moves more frequently than November 15th options prices expect. There are many potential catalysts that could cause the move we are looking for with an option buying strategy. [This Volatility ConeÂ]( chart for NVDA compares implied volatility expectations for each term to the historical volatility for that same term. The blue line shows the average historical volatility; the purple lines show each HV measure’s highest high and the lowest low over the past 2 years. You can see that the one-month term (which is the term we are interested in) is below the 2-year historical average. This confirms that options expiring on November 15th are relatively inexpensive. NVDA is always trending in news and on social media. It’s interesting that social media mentions are actually down -99% in the last 24 hours. But the stock is so popular that it still outshines many other stocks that are in the spotlight. The fact that social media mentions are down may work in our favor. We may have less competition as we try to buy options at a low price.  To get the specific details and prices on today’s trade ideas, be sure to read today’s ODDS Online Daily Option Trade Idea.  To access Odds Online Daily and be able to see any stock you are tracking in this software, click [here](. Thank you, Don Fishback --------------------------------------------------------------- See Related Articles on [TradewinsDaily.com]( [NVIDIA Corporation (NVDA), Trending Stock Report]( [Chart of the Day: DraftKings (DKNG)]( [NVDA Pushes Tech Higher And Sets Up This Trade]( [String of New Highs for Morgan Stanley]( [Taiwan Semiconductor Manufacturing Company Limited (TSM), Trending Stock Report]( --------------------------------------------------------------- [TradeWins Logo]( © 2024 Tradewins Publishing. All rights reserved. | [Privacy Policy]( | [Terms and Conditions]( | [Contact Us]( Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC's website: All About Auto-Trading, TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading. 1. The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the "Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by TradeWins Publishing ("TradeWins") a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. The Services are intended to supplement your own research and analysis. 2. TradeWins' Services are not a solicitation or offer to buy or sell any financial products, and the Services are not intended to provide money management advice or services. 3. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk. Trading on margin carries a high level of risk, and may not be suitable for all investors. Other than the refund policy detailed elsewhere, TradeWins does not make any guarantee or other promise as to any results that may be obtained from using the Services. No person subscribing for the Services ("Subscriber") should make any investment decision without first consulting his or her own personal financial adviser, broker or consultant. TradeWins disclaims any and all liability in the event anything contained in the Services proves to be inaccurate, incomplete or unreliable, or results in any investment or other loss by a Subscriber. 4. You should trade or invest only "risk capital" money you can afford to lose. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more. 5. All investments carry risk and all trading decisions made by a person remain the responsibility of that person. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Subscribers should fully understand all risks associated with any kind of trading or investing before engaging in such activities. 6. Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Simulated trading services in general are also designed with the benefit of hindsight, which may not be relevant to actual trading. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. TradeWins makes no representations or warranties that any account will or is likely to achieve profits similar to those shown. 7. No representation is being made that you will achieve profits or the same results as any person providing testimonial. No representation is being made that any person providing a testimonial is likely to continue to experience profitable trading after the date on which the testimonial was provided, and in fact the person providing the testimonial may have experienced losses. 8. The author experiences are not typical. The author is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position and other factors. Certain Subscribers may modify the author methods, or modify or ignore the rules or risk parameters, and any such actions are taken entirely at the Subscriber's own election and for the Subscriber's own risk. If you wish to unsubscribe from our newsletter, click [here]( TradeWins Publishing Corp.528 North Country Rd.St. James, NY 11780