US Markets
Home›US Markets›Options›Nvidia stock faces sell-the-news risk after Q2 as opti…
Nvidia stock faces sell-the-news risk after Q2 as options skew turns cautious
With Nvidia set to report Q2 results on Aug. 26, options pricing for the Aug. 28 expiration suggests traders are paying an implied volatility premium for out-of-the-money puts.
Nvidia shares face a potential sell-the-news setup after the companys second-quarter earnings report, scheduled for release on Aug. 26, according to Yahoo Finance.
The article highlights a still-constructive backdrop, citing Barchart Technical Opinion that rates NVDA as an 80% Strong Buy, and notes the stock is up 6% over the trailing month. It also points to analyst optimism, including a consensus price target of just over $304 and a higher share of bullish than bearish coverage on Google Finance.
Still, Yahoo Finance flags a more cautious signal from the options market around the post-earnings window. It says the volatility skew for the Aug. 28 expiration, just two days after the Q2 report, takes the shape of a smirk, with traders paying an elevated implied volatility premium for out-of-the-money puts.
The piece argues that, despite the bullishness in narrative and coverage, the options market suggests the post-earnings outlook is more nuanced, with the premium increasing the further the puts are out of the money.