Ceasefire to Expire Soon. US-Iran Set to Initiate Talk: What to Know
Options Weekly Roundup - Nvidia Drops 7% Post-earnings, U.S.–Iran War Ignites Geopolitical Risk: The Art of Offense and Defense in Options
Hello Mooers,
U.S. equities finished last week on a softer note, with investors increasingly rotating away from crowded risk and re-pricing both AI winners/losers and the rate path. For the week ending Feb. 27, the S&P 500 fell 0.4%, the Dow lost 1.3%, and the Nasdaq slipped 1.0%, while Friday’s session saw another broad decline as inflation worries and geopolitical risk added pressure. Reuters also noted that February marked the steepest monthly drop since March 2025 for both the S&P 500 and Nasdaq, with sentiment hit by AI disruption fears, tariff uncertainty, and renewed geopolitical tensions.
On earnings, Nvidia delivered a fundamental beat (Jan-quarter revenue of $68.13B vs. $66.21B expected; adjusted EPS $1.62 vs. $1.53), and guided fiscal Q1 sales to $78B ±2% versus a $72.6B consensus. However, the market reaction remained muted as investors pushed for stronger cash returns and questioned how much good news was already priced in.
Macro-wise, Friday’s hotter-than-expected U.S. PPI reinforced the view that the Fed may stay on hold until at least June, while economists raised January core PCE estimates.
What’s Trending
(1) Nvidia’s Earnings
Without a doubt, Nvidia’s earnings were the market’s focal point last week. Although Nvidia delivered what was arguably one of the best earnings reports in its history, the stock continued to sell off for two straight sessions after the release, falling more than 7% cumulatively. Against a backdrop of broad weakness across other sectors, NVDA’s post-earnings decline reflected a clear risk-off mood in the market.
@ImSteven shared an options strategy ahead of earnings. Unlike the more common approach of using weekly options or near-expiry contracts to bet on earnings, this article offered a way to improve the probability of success while also positioning to capture a post-earnings trend move.
For weekly options, you’re basically making a one-shot bet—your error tolerance is extremely low. With little time left to expiration, there’s no room to recover.
If you want more breathing room, a common approach is to extend the expiration and buy 1–2 month options at similar strikes (ATM) or slightly OTM. Extending duration is essentially a bet on a post-earnings trend leg—because there’s still plenty of time, the position is less vulnerable to the short-term violent swings right after the print. Once the earnings volatility settles and the “real” trend emerges, you can potentially capture that move.
The risk, of course, is being wrong on direction. Longer-dated options cost more time value—so if you’re wrong and the option doesn’t gain intrinsic value, you can lose more in dollar terms. That’s why if you extend duration, it’s important to define a stop-loss level. Read more>>
(2) AMD-Meta Jumbo Deal
Another major chip-sector leader this week, AMD, surged 8% after signing a long-term order agreement with Meta. In his article, @LukeHW provided an AMD options strategy.
Strategy 1: Bull Call Spread (Moderately Bullish)Setup: Buy a near-the-money call, sell an out-of-the-money call (same expiration)Rationale: Captures further upside from the Meta deal narrative while capping risk. Lower cost than a naked long call.
Strategy 2: Protective Put or Collar (For Existing Holders)Setup: If you already own AMD shares after this run, buying a put can help protect gains; optionally sell a covered call above to help finance the put. (Details of breakeven, max profit/loss, see Figure 6.)Rationale: Lock in the 8%+ gain while maintaining upside exposure. Read more>>
Opinions
(1) Caution on the War
Although the U.S. and Israel’s strikes on Iran erupted over the weekend, some Mooers had already flagged the risks in advance. For example, @The Mentor highlighted the potential for extreme market volatility and the dangers of betting on near-expiry (0DTE) options:
The stock market will only move this week with political news. In fact, it will not only be this week—it will be as long as the war goes on. The only way technicals, indicators, and chart reading will work is if there is no news during the day, but watch out for every single little piece of news that comes out to the public because the market will swing wildly up and down a percent before you can blink.
For those of you who do zero days to expiration in SPY and $Invesco QQQ Trust (QQQ.US)$, watch out, because the premium will be very expensive tomorrow. The market will be extremely volatile in the first hour to hour and a half after the open...
VIX will be something special you do not want to miss out on for the entire week, and this is the most important—and only—indicator that will help you trade as well! Read more>>
(2) Has the SaaS Sector Bottomed Out?
Regarding the software sector’s continued weakness in recent weeks, @Sarge believes Salesforce’s decline has become excessive relative to its fundamentals and that the stock may have rebound potential. He suggested using a bull call spread to position for a rebound.
Readers will see that despite the stock having surrendered all three of its key moving averages, Salesforce's secondary technical indicators shown above are acting just a wee bit better.
For example, the stock's Relative Strength Index (or "RSI," marked with a gray line at the chart's top) is flirting with the possibility of exiting technically oversold territory.
And while all three components of Salesforce's daily Moving Average Convergence Divergence indicator (or "MACD," denoted by a black line, gold line and blue bars at the chart's bottom) are still in negative territory, there's some cause for hope. Read more>>
Riding the Wave
Last week, Netflix called off its acquisition of Warner Bros., and its stock surged 13% on the day. Given that NFLX had already shown clear upside momentum beforehand, investors who followed the trend could profit quite easily.
For example, @104165902 used one-month-to-expiration call options to trade the move and achieved a 342% return. Read more>>
User @Hung415 positioned early on the 26th and earned a 120% return. By the 27th, that option was likely up more than 200%. Read more>>
Looking Forward
Over the weekend, the Iran war became the dominant risk driver: Reuters reported U.S./Israeli strikes on Iran and retaliatory attacks that disrupted shipping around the Strait of Hormuz, sending Brent up as much as 13% intraday before paring gains (while still ending sharply higher), with gold rising and risk assets weakening. In early Monday trading, S&P 500 and Nasdaq futures were each down about 0.8%, the Nikkei fell 1.3%, Europe futures were lower, the dollar firmed, and the U.S. 10-year yield hovered near 3.97%.
Over the next few weeks to months, the market may face strong headwinds and heightened volatility. To help everyone navigate what could be a highly volatile and highly uncertain environment, we at moomoo have prepared a “Downturn Survival Notebook” series. There are currently three articles available, and we hope they can help you get through the period ahead.
Earnings to Watch
SE — Mar. 3 (pre-market)
CRWD — Mar. 3 (after-hours)
AVGO — Mar. 4 (after-hours)
MRVL — Mar. 5 (after-hours)
With multiple macro, geopolitical, and earnings factors in play, market volatility may pick up this week—creating more opportunities for options trading!
If you find this article useful, don’t hesitate to tap ❤️, drop a 💬, and spread the wisdom! 🌟
Stay tuned for more, and happy trading! 🌟
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.Read more
Comments (442)
to post a comment
1336
13