Daily Options Outlook | NVIDIA rises modestly in pre-market trading after earnings; memory sector rebounds in pre-market; Tesla up 1.76% pre-market, with SpaceX’s IPO prospectus repeatedly referencing Tesla, reinforcing market expectations of enhanced synergy between the two companies

Today's Options Market Outlook

On the individual stock level, $NVIDIA (NVDA.US)$ Reported earnings after the market close yesterday, with revenue up 85% year-over-year, exceeding expectations, and a stable gross margin of 75% at a high level. The stock price initially fell in after-hours trading but turned higher in pre-market trading. Options market signals show NVIDIA's put/call volume ratio at 0.46, implied volatility (IV) at 48.83%, and IV percentile at 70%, indicating that market participants were bullish on NVIDIA's earnings yesterday.

The memory sector has warmed up following a recent pullback, $Micron Technology (MU.US)$ up 2.12% in pre-market trading, $SanDisk (SNDK.US)$ up 1.49%, $Western Digital (WDC.US)$ up 1.95%. The options market shows SanDisk's put/call volume ratio at 1.54, with mainstream investors primarily using put options to hedge their long equity positions.

$Tesla (TSLA.US)$ Up 1.70% in pre-market trading. SpaceX is nearing its IPO and repeatedly referenced Tesla in its public prospectus, fueling market expectations that both companies are jointly betting on AI through the Terafab project. Options market signals show Tesla's put/call volume ratio at 0.49, with an IV percentile of 36%, reflecting bullish sentiment in the market.

Review of yesterday's options market

Index Options

On May 20 Eastern Time, U.S. equity index options market volume declined, with a total of 6.31 million contracts traded. The put/call volume ratio dropped to 0.78.

As the upcoming expiration date approaches,$S&P 500 Index (.SPX.US)$ Options volume distribution shows the following characteristics: peak put option volume at the 7,300 strike, and peak call option volume at the 7,440 strike.

Single Stock Options

$Advanced Micro Devices (AMD.US)$Rose 8.10%, with 455,600 options contracts traded, and the put/call volume ratio declined to 0.63. AMD executive Forrest E. Norrod plans to sell 19,500 shares, valued at approximately $8.4068 million.

$Alphabet-A (GOOGL.US)$Up 0.32%, with 535,300 options contracts traded, the put/call volume ratio dropped to 0.41. Google announced a $15 billion investment in Missouri to build a data center and establish a $20 million Energy Impact Fund.

Top list of options trading volume

Among the top 10 stocks by options trading volume,$Advanced Micro Devices (AMD.US)$had the highest put/call volume ratio, reaching 0.63.

The highest put/call open interest ratio is$Micron Technology (MU.US)$, reaching 1.19. Micron Technology’s stock rose 4.7% following the collapse of Samsung Electronics’ strike negotiations, which could affect 3% of global memory chip production capacity.

Implied volatility rankings (underlying market cap > $10 billion and options trading volume > 100,000)

$POET Technologies (POET.US)$Implied volatilityreached the highest level at 171.90%, up 2.59% from the previous trading day. POET Technologies completed a $400 million financing round and secured an initial $50 million order from Lumilens.

$T1 Energy (TE.US)$recorded the largest increase in implied volatility, reaching 163.32%, up 21.81% from the previous trading day. T1 Energy’s stock surged 34.5% to $9.26, hitting a three-month high.

Risk Warning

An option is a contract that gives the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or before that date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility.

Implied volatility reflects the market's expectation of the option's volatility over a certain period in the future. It is derived inversely from the BS pricing model of options and is generally considered an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay higher prices for options to hedge risks, resulting in higher implied volatility.

Traders and investors use implied volatility to assessOption priceto enhance attractiveness, identify potential mispricing, and manage risk exposure.

Disclaimer
This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee of any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses may exceed the initial margin deposited. Even if you set contingent orders such as 'stop-loss' or 'limit' orders, these may not prevent losses. Market conditions may make such orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any shortfall in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures for exercising options and the rights and obligations upon exercise and expiration. Options trading carries extremely high risks and is not suitable for all investors. Investors should carefully readCharacteristics and Risks of Standardized Options。

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