Nvidia delivers another blowout earnings report … Bitcoin approaches $100K … how zero-day options can explode your returns
The age of AI is in full steam, propelling a global shift to NVIDIA computing.
So says, Jensen Huang, founder and CEO of NVIDIA.
After market close yesterday, the chip giant and poster child for AI investing provided another blowout earnings report. Earnings per share soared 111% from last year, and revenues jumped 94% over the same period.
Back to Huang:
AI is transforming every industry, company and country. Enterprises are adopting agentic AI to revolutionize workflows. Industrial robotics investments are surging with breakthroughs in physical AI. And countries have awakened to the importance of developing their national AI and infrastructure.
So, why was Nvidia down this morning (though it’s turned positive as I write mid-afternoon)?
Nitpicks.
There was a slight sequential decline in gross margins… the revenue guidance looking forward didn’t meet the highest of high expectations… and, similarly, overall guidance wasn’t utterly flawless.
Most likely, today’s pullback was shorter-term traders who want a continuation of high-octane growth rotating out of their positions. Despite the fantastic numbers, Nvidia’s growth forecasts are slowing relative to past quarters – inevitable due to its behemoth size.
However, the story for longer-term investors remains incredibly bright. On that note, here’s legendary investor Louis Navellier with his bottom line on today’s earnings report:
Nvidia is my largest holding, by far. I have no intention of selling it. I’m going to hold at least until the end of the decade… No one can compete with them… So, I’m very, very happy with Nvidia.
Not much I can add to that.
The second big piece of news this morning is Bitcoin
As I write, Bitcoin trades at almost $99,000 as this blistering rally continues. But be careful…
Bitcoin has exploded 78% since early-September. As you would imagine based on the size of this move, the trade is incredibly overbought.
Both the Relative Strength Index (RSI) indicator and the Moving Average Convergence/Divergence (MACD) indicator show wildly stretched technical conditions. This increases the likelihood of a pullback and period of consolidation. My guess is it will arrive shortly after Bitcoin hits $100K.
This morning, Galaxy Digital CEO Michael Novogratz warned that leverage will intensify the coming correction:
There’s a ton of leverage in the system right now. … The crypto community is levered to the gills, and so there will be a correction.
Despite whatever correction comes, we encourage you to hold onto your Bitcoin. With Trump headed back to the White House and making crypto-friendly appointments, we see 2025 shaping up as a banner year for the sector.
It will be volatile, but it should be even more profitable.
Speaking of profits…
After the Fed cut interest rates 50 basis points at its September FOMC meeting, the Nasdaq jumped 2.51% the following day
Tech traders had a fantastic session. But while a same-day 2.51% return is great, that same move could have returned 1,788%. That turns $500 into roughly $9,000…in only a handful of hours.Â
This wasn’t a one-off anomaly. It’s the type of return that’s possible using a financial instrument that’s been gaining enormous popularity over the last two years: zero-day options.
This is an option that, as its name suggests, expires the same day. And while there are risks for sure (that we’ll discuss momentarily), the potential financial payoff is greater than just about anything you’ll find in the market.
To illustrate, let’s borrow from an example provided by BankRate.com in September:
Imagine you can purchase a $20 call option on a $20 stock for $0.10, with the option expiring at the end of the day. The total cost of a single contract is $10, or 100 shares * 1 contract * $0.10.
Then, let’s imagine you buy 10 of these contracts for a total of $100.
Bankrate.com runs through various potential outcomes – let’s assume one of its bullish ones. Say this hypothetical company reports blowout earnings, resulting in its stock jumping from $20 to $22.
The specified zero-day option would explode 1,900%.
So, that $100 investment made in the morning?
By the afternoon, it’s turned into $1,900.
Here’s Bankrate with some additional possibilities:
If the stock moves just 2.5%, then the option goes up 400 percent in value. A 5% move would lead to a 900% gain in the option.
These massive gains in a short time frame are what traders of zero-day options are hoping for.
Earlier this week in the Digest, we put this coming Tuesday at 11 am ET on your radar
That’s when our resident master option trader Jonathan Rose will be broadcasting in real time, demonstrating the power of zero-day options. This won’t be pre-recorded. It’ll be a live, one-time-only event showing attendees exactly how these options work when rubber meets road.
But before we go any further discussing the benefits of this financial tool, let’s address the issue you’re probably thinking about – risk.
Frankly, you’re 100% correct to be thinking this way. That’s how wise traders view the markets. And you’re right – short-term options can be risky. If the underlying stock doesn’t move how you hope, you could lose your entire $100 investment.
But one of the great things about options is that you can dial up or down your risk to match your specific temperament. So, don’t want to speculate with a full $100? No problem, dial it back to just $50.
Even a $50 investment in the hypothetical we walked through a moment ago would grow into $950 by the afternoon. That’s not a bad risk/reward profile!
The point is you don’t need to put down huge amounts of money to make a lot. In fact, you shouldn’t put down huge amounts. Jonathan would be the first person to remind you of that.
But dialing up or down your investment amount isn’t the only way to adjust your risk level when using short-term options. Here’s Jonathan:
Additionally, there are options that expire within one to three days – known as 1DTE, 2DTE, or 3DTE options – giving you a slightly longer window to execute your trades while lowering your exposure to risk.
By hedging your short-term risk and piling into trades at the right time, you can find some of the most powerful opportunities for gains in the stock market.
Extremely short-term options trades provide us the tools to maximize our potential gains like no single stock play can.
Let’s go one step deeper – how do you maximize the odds that you enjoy a huge payday?
For a zero-day option to really pay off, you need the underlying stock to make a major move. So, your timing has to be just right.
After all, if your option expires in one day (or within three days as Jonathan sometimes chooses), then you’d better have nailed your entry timing or else your option will expire worthless.
This is why you never randomly buy a zero-day option and just cross your fingers. Instead, you do what the pros do: use a suite of indicators and market tools that give you an edge.
The tools Jonathan uses are engineered to identify one thing: market conditions featuring outsized potential for volatility spikes. This is basically jet fuel for zero-day options moves.
Back to Jonathan:
To harness the power of short-volatility trading, unusual moves in the market are essential.
So, we keep an eye on the major volatility indicators out there, especially the 1-day (VIX1D) and 9-day (VIX9D) indices… The VIN and VIF provide a broader view of how volatility might shift in the longer term as well.
We subscribe to a simple rule here…
If short-term volatility is rising while longer-term volatility remains low, this usually signifies a short-lived but significant spike in volatility. That’s typically what we need to see to execute the perfect short-term trade.
Of course, it’s not enough to just study a few indices and charts. In extremely short-term volatility options trading, education always mitigates risk.
This reference to “education” brings us back to next Tuesday’s live event
While a major goal of the event is to help you put a wad of cash in your pocket, the more important goal (in my opinion) is education.
Yes, Jonathan is a world-class trader – he’s pulled millions out of the market over the last 10 years after having spent time as a floor trader on the Chicago Mercantile Exchange. But more important to you and me is that he’s an equally fantastic teacher.
That’s my personal take after having watched Jonathan in action. But his subscribers agree with me. Here are a few of the kudos he’s received from subscribers who share my opinion:
- “Jonathan, I want you to know I really appreciate the way you teach us from a professional perspective. It’s helping”
- “Appreciate all that you’re doing and planning for us!”
- “Thank you, JR! As a self-learner, you can get info from so many resources, but until someone who really understands can show you a hard example, I am always a little apprehensive. Thanks for helping build my foundation of knowledge.”
Circling back to zero-day options, remember – they’re not just about swing-for-the fences gains
As we pointed out earlier this week, they can also be an incredibly powerful way to protect the gains that you’ve already made.
But whether you’re using them to try to generate a 500%+ return in a few hours or you’re using them to protect a 500%+ gain that you’ve made over a few years, it all begins with learning – and that’s what this Tuesday’s live event is all about.
Back to Jonathan:
I want to help anyone reading this article.
That’s why I’ve put together a special presentation that will help you identify the best opportunities for quick options plays on the market.
Using the system I’ve developed, you’ll not only discover the key to quick, consistent gains trading options… You’ll also understand how trading pros protect their portfolios from market uncertainty by adding upside and downside coverage that allows them to stay nimble whatever the markets throw at them.
With this presentation, you’ll get a clearer picture of how volatility shapes the options market, and you’ll gain the depth of understanding necessary to execute creative trades based on all the market criteria I’ve outlined above.
This is a rare opportunity to learn about a whole approach to options that is driving millions of dollars in trading volume as I write to you. There’s no reason you should miss out on this market phenomenon.
Bottom line: Whether your primary interest is offense or defense, Jonathan will put you in the driver’s seat this coming Tuesday at 11 am ET. You can register right here.
Have a good evening,
Jeff Remsburg
