NVDA vs. SMCI: Analyzing Sentiment from Options Volatility
With the kickoff of NVIDIA's GTC 2024, three significant bombshells were dropped:
1. Blackwell's advancements in cost and energy consumption improved 25 times over its predecessor, making it the world's most powerful chip.
2. The inference performance of GB200 NVL72 increased up to 30 times compared to H100.
3. The introduction of the AI project Project GR00T to boost humanoid robots.
However, despite these announcements, NVIDIA's stock price experienced a high opening followed by a decline, closing up only 0.7%, making it the second-worst performing GTC day in the past eight years. This could be attributed mainly to the "Sell the News" phenomenon, with market expectations being fully priced in ahead of the event, leading to partial profit-taking.
Interestingly, the status of several AI stocks has shown disparities:
$NVIDIA(NVDA.US$ – The leading chip company.
$Advanced Micro Devices(AMD.US$ – A chip company with a chance to fill the gap.
$Super Micro Computer(SMCI.US$ – A high-volatility strong backup in the supply chain.
$SoundHound AI(SOUN.US$ – Primarily driven by concept speculation.
$Intel(INTC.US$ – Currently lagging behind in the chip sector.
$Micron Technology(MU.US$ – A leader in capacity supply-demand guidance.
Options strength and weakness can better reflect investors' risk sentiment.
Implied Volatility (IV) Intensity:
In absolute terms, speculative stocks like SOUN currently maintain an IV close to 200%, while the relatively lower one is observed for $Intel(INTC.US$.
In relative terms, NVDA's IV is currently in the middle of its one-year high and low, similar to MU, SMCI, and SOUN. However, AMD and INTC are closer to their respective lows.
Two other important indicators, IV Rank (the percentile rank of current IV compared to the highest and lowest IV values over the past year) and IV Percentage (the percentage of days in the past year when IV was lower than the current IV), suggest that the current sentiment is relatively stable.
For instance, NVDA has an IV Percentage of 86% and an IV Rank of 76%, indicating stable sentiment. While AMD's overall IV is slightly lower, it remains relatively stable. However, SOUN and SMCI show significant disparities, suggesting a rapid decline in speculative sentiment.
Volatility Skewness:
The PUT/CALL ratio for NVDA has consistently hovered around 2.17, which is also the median for these stocks.
However, looking at skewness, most options chains, such as the April 19th expiry, are right-skewed, meaning that Call (out-of-the-money) IV is higher than Put (out-of-the-money) IV. This is contrary to most situations, as $SPDR S&P 500 ETF(SPY.US$ and $Invesco QQQ Trust(QQQ.US$ typically exhibit long-term left-skewness.
Right-skewness indicates more active buying of Calls, reflecting bullish sentiment. However, SMCI is an exception, showing left-skewness across multiple periods, suggesting greater downward pressure.
In summary, despite the lackluster performance on the day of GTC, sentiment in the options market suggests that we have yet to see a reversal in sentiment.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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TestLa Kopi : "The PUT/CALL ratio for NVDA has consistently hovered around 2.17, which is also the median for these stocks. "
Any option website will tell you the current put/call ratio for Nvidia is less than 1.