TECH - Strategist Explains How Nvidia Options Traders Should Position Themselves Ahead Of Friday's Stock Split | Benzinga
Nvidia Corp. (NASDAQ:NVDA) shares retreated on Thursday after the company’s market cap breached the $3 trillion mark in the previous session. An options strategist delved into the volatility seen in the stock ahead of the imminent split.
What Happened: Nvidia options are priced extraordinarily high with a stock price over $1000 and 50% implied volatility, said Matt Amberson, founder of Option Research & Technology Services, in an interview with Yahoo Finance.
“Options traders are really looking forward to the split,” the strategist said, adding that it will help them trade it a lot easier without the $1,200 price tag.
The beta of Nvidia is 1.7, which suggests the stock would outperform when the market goes higher and underperform when the reverse happens, Amberson said. Options traders could profit from not being short but being long spread so that traders can do this way out of the money spreads, he said.
A long spread gives traders the right to buy stock at strike price A and obligates them to sell the stock at ...