Daily options seller strategy | MRVL up over 130% year-to-date; implied volatility surges to historic highs ahead of earnings—how to use options to capture this volatility?

I. Market Barometer

All three major U.S. indices rose in the previous trading session, with active trading in the semiconductor sector. The leading custom AI chip company $Marvell Technology (MRVL.US)$ continued strengthening ahead of its earnings release, with a year-to-date gain exceeding 130%. Implied volatility (IV) on its options has surged to a historic high of 128%, creating a high-premium window for options sellers.

II. Focus on Hot Targets

$Marvell Technology (MRVL.US)$ : IV Jumps to 128% Ahead of Earnings; Institutions Ramp Up Target Price Revisions

$Marvell Technology (MRVL.US)$ closed the previous session at $196.33, up 2.96%, reaching an intraday high of $198.39—an all-time high—with a year-to-date surge of over 130%.

The stock is currently in a strong uptrend, with the 5-day, 10-day, 20-day, 30-day, and 200-day moving averages forming a perfect bullish alignment. The 30-day moving average sits around $162, and the 200-day around $95. The current price trades significantly above both short- and long-term moving averages, warranting attention to potential pullback pressure. Near-term resistance lies at the psychological $200 mark, with support near the $160–$170 range. RSI is in overbought territory but shows no clear bearish divergence yet.

The company will report its Q1 fiscal 2027 earnings after the U.S. market close on May 27(Corresponding to calendar Q1 2026), consensus estimates call for EPS of $0.80 (up 27.4% year-over-year) and revenue of approximately $2.41 billion (up roughly 30% year-over-year). Institutional forecasts for Q1 2027 project revenue of $2.401 billion, an increase of 26.67% year-over-year, and EPS of $0.324, up 62.15% year-over-year. (The figures above are based on US-GAAP accounting standards.)

The drivers behind earnings growth are clear: strong demand for the Trainium 2 AI chip co-developed with Amazon AWS, coupled with NVIDIA’s recent earnings results validating sustained AI infrastructure spending.

The market will closely monitor progress and updated guidance on the two core businesses driving its growth:

The first is AI ASICs (application-specific integrated circuits).This business segment partners with $Amazon (AMZN.US)$ , and is deeply integrated with the in-house chip initiatives of cloud giants such as Google. Last month, reports indicated that $Alphabet-A (GOOGL.US)$ it is in talks with Marvell to co-develop two new AI chips. The market is eager to learn from the earnings call about the latest progress on this potential partnership and whether discussions can advance from 'talks' to a 'formal contract.' Amazon is currently its largest customer, and investors are watching closely whether its second-largest cloud customer’s project can ramp into volume production in fiscal year 2028 to mitigate customer concentration risk.

Its second-largest business segment is optical interconnects.This segment is viewed as the company's second core growth pillar, $NVIDIA (NVDA.US)$ and the previously announced $2 billion investment is closely tied to this initiative. Company management has raised its fiscal year 2027 growth outlook for this business from 30% to over 50%. The earnings report must validate whether this aggressive growth target is already reflected in orders and revenue.

The market is also focused on how quickly its 1.6T products are gaining adoption and when the silicon photonics and CPO (co-packaged optics) technologies acquired through Celestial AI will begin contributing meaningful revenue (the company previously indicated fiscal year 2028).

Options markets imply an expected single-day post-earnings stock price move of 13.01%. Implied volatility (IV) spiked to as high as 100% ahead of the earnings release; as of the last trading day, IV stood at 89.81%, with an IV percentile of 96%, indicating that option prices are at historically elevated levels—reflecting significant uncertainty priced in by the market around this earnings report.

Several top-tier institutions significantly raised their price targets ahead of the earnings announcement.Stifel raised its price target from $140 to $210, maintaining a Buy rating, citing data center growth, optical interconnect demand, and custom AI chip projects as key drivers. Citi lifted its target even more dramatically—from $118 to $215—also maintaining a Buy rating, highlighting strong demand for Trainium 2 ASICs. Overall, 85% of analysts have issued Buy ratings, with an average price target of approximately $157 and a highest target of $220. However, it should be noted that the current share price already trades well above the average target, suggesting that analyst price targets have not kept pace with the recent surge in the stock.

III. Seller Options Strategy

1. Cash Secured Put

Sell 1 contract of $Marvell Technology (MRVL.US)$ June 18, 2026 $150 Put; estimated margin requirement (for reference only): $15,000 ($150 × 100)

Opportunity filtering logic:

For investors who have not yet established a position but wish to participate in the long-term growth narrative of customized AI chips, Marvell’s stock is currently trading near all-time highs, and elevated implied volatility ahead of the earnings window presents a risk of a post-earnings pullback if positive expectations are already priced in.

However, the company's fundamentals continue to strengthen, with Stifel and Citi having raised their price targets to $210–$215. By selling puts, investors can collect substantial option premiums (thanks to high implied volatility) to boost the annualized return on idle cash if the stock remains strong or trades sideways at elevated levels after earnings. Should the share price retreat due to earnings-related volatility toward the $150 strike price, investors would still acquire the stock at a cost below current market levels, enabling them to build a position in this leading customized AI chip company at a more attractive entry point.

IV. Risk Control Reminder

Although the seller strategy has a high probability of success, investors must still manage risks effectively:

– Position management is key:The biggest risk for option sellers lies in black swan events. It is recommended that margin exposure for a single underlying should not exceed 20% of total capital. Never sell options beyond your capacity for the sake of greedy premiums.

– Timely rolling of covered call options: When a covered call option becomes deeply in-the-money (stock price far exceeds the strike price), and if the underlying stock is still viewed favorably, decisively 'roll' the position — that is, close the current option by buying it back and simultaneously sell an option with a later expiration date and a higher strike price to avoid having the stock called away at a low price.

– Cash-secured put options warn of 'left-tail risk':For cash-secured puts, if the stock price collapses due to deteriorating fundamentals (rather than a normal pullback), do not hold on stubbornly. At this time, stop losses should be executed, or 'rolling down' can be employed to buy time and wait for volatility to normalize.

Make good use of the options seller zone to understand the income strategies for selling optionsEarn option premiums!

Options Risk Warning

An option is a contract that grants the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or at any time 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 expectations for the level of volatility in the option over a future period. It is a data point derived inversely from the Black-Scholes option pricing model and is generally regarded as an indicator of market sentiment. When investors anticipate greater volatility, they may be more willing to pay a higher price for options to hedge risks, resulting in higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage risk exposure.

Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or tools. The risk of loss in trading options can be substantial. In some cases, losses incurred may exceed the initial margin deposited. Even if you set contingency orders, such as 'stop-loss' or 'limit' orders, these may not necessarily 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 resulting from such liquidation. Therefore, before trading, you should study and understand options and carefully consider whether such trading suits 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 expiration. Options trading involves extremely high risks and is not suitable for all investors. Investors should read Characteristics and Risks of Standardized Options carefully before engaging in any options trading strategy.

Editor/Doris

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