Nvidia | Trading the Evil Eye
Predicting precise stock movements is inherently difficult, particularly around earnings announcements, due to potential market volatility. This is especially true for a mega-cap stock like $NVDA, which carries the expectations of many investors. ![]()
Key Factors
Key factors that will affect Nvidia's stock price include
– AI demand: Any indication of a slowdown or acceleration in AI-related spending will likely have a significant impact on the stock
– Earnings and Guidance: Wall Street expectations are high. Meeting or exceeding these expectations is crucial.
– Macroeconomic Uncertainty: Factors like inflation, interest rates, and geopolitical tensions will add to market uncertainty
My Take
I own $NVIDIA (NVDA.US)$ stock with substantial gain and I'm hoping the upcoming earnings will push the stock price even higher. But, Wall Street's been really strict lately, scrutinizing tech earnings and dropping stock prices at the slightest miss (like $Amazon (AMZN.US)$ and $Microsoft (MSFT.US)$ on AI capex worries). So, while I'm holding my long $NVDA position, I'm also planning a different trading strategy. Let's see how I'll be trading the Evil Eye this quarter. ![]()
Stock Price Expectations
What's Wall Street expecting from Nvidia? Like we said, even if Nvidia nails the earnings, there's no guarantee the stock will go up. We are in a crazy market, so we need to look at both sides, whether the stock goes up or down. ![]()
Here's the history of expected versus actual stock moves for the last ten quarters. We can see the move has been near or within the expected range for the last three. For this 2025 Q4, if the expectation's right, it's expected to move 8.5% either way. ![]()
P/S: You can get the historical data below from Moomoo under the Option>Earnings tab of the stock.
Trading Strategy
Since I am holding the $NVIDIA (NVDA.US)$ main stock for long, I will just keep it this way and not trading it for the earnings. Instead, I will trade on the $GraniteShares 2x Long NVDA Daily ETF (NVDL.US)$ leveraged ETF. The plan is to trade the options of $NVDL with a strategy that will benefit from the minimally 8.5% swing of the main stock. I decided to sell an out-of-the-money (OTM) call option and an OTM put option with the same expiration date, which is basically a short strangle. The strike prices are much wider in my case at $42.9 and $89.10 respectively as I would like to lower the risk as much as possible while happy with the premium collected. ![]()
Of course, there are many other strategies (e.g. straddle, iron condor, iron butterfly etc) you can use if you expect the stock to move within the range. I am more familiar with the strangle strategy and that became my choice to trade. You will need to understand the risk behind the strategy as well before deploying it. Everyone has their own risk appetite, and you will have to weight it yourself based on your risk profile. ![]()
Going into Earnings
Given the confidence in Nvidia's of surpassing earnings estimates, I anticipate a positive stock price reaction. Regardless, I believe my long-term holding and the options strategy will generate favorable returns. Let’s end the post with some positive vibes and let’s all wait for the spectacular moment this coming Wednesday. $NVDA to the moon! ![]()
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Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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WolfRun
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Be the Wolf on Wall Street｜Hunt for value. Howl for returns ⭐️
化为华尔街之狼｜猎价值。啸回报 ⭐️
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