Why I'm playing NVDA back up here
NVDA has sold off hard. The thing I keep looking at is how calm the options market is staying about it.
Three things I'm noticing on the surface.
One. The vol is catching zero bid on the way down. That's unusual for a name dropping like this.
Two. The stock is reaching a large volume shelf where real support tends to sit.
Three. The put skew isn't really moving on the drop. Nobody is scrambling to pay up for downside.
A surface that stays this calm into a sell-off usually points to sellers getting exhausted. When a stock drops and the options market refuses to price any fear, that's normally the tell that the move is closer to done than starting.
The price action says the trend is broken. The surface says the trend is pausing. I'm leaning with the surface.
I used an August call spread to play a resumption of the trend higher. For me, the recent Mag7 weakness looks close to ending. NVDA's own surface is backing that read more than the price action is.
Reading a surface like this in real time is the difference between catching trades like this and watching them happen to others that know what they are doing. The framework I built across 20 years on bank options desks is the starting point. Click the link below.
The lesson is bigger than NVDA. The surface tells you things the price chart can't. When the options market refuses to confirm the panic in the spot, the spot is usually wrong.
If you want to skip the masterclass and jump straight into the Options Insight Advantage, this is the link.
Imran
Disclaimer (Your Gains & Losses, Your Responsibility): This content from Options Insight LLC (“Options Insight”) is for educational purposes only and does not provide individual investment advice or recommendations, nor should it be considered an offer to buy or sell any security. All information is general and not tailored to your specific objectives, financial situation, or risk tolerance. Employees of Options Insight may hold positions in the assets discussed. While we use sources believed to be reliable, we are not responsible for errors, omissions, or losses resulting from reliance on this content. Always consult a licensed investment professional.
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