NVDA’s Impressive Run and Options Activity Today
With NVDA witnessing a 4.7% rise amidst unusual option volume this afternoon, option traders could be eyeing a potential bullish call opportuntiy, especially in the final trading hour.
NVDA Chart side by side of stock and options volume.
Considering a Bullish NVDA Call Trade as the Market Closes? Key Questions to Guide You
When you are contemplating a call option trade, you are primarily concerned about the stock’s direction and option’s premium. From this perspective, you may look to historical data to help answer some important questions like:
Do NVDA’s average returns in the final hour demonstrate a positive trend? Such a pattern may suggest a historical bias in favor of bullish call options.
What’s the frequency of upward movements? This helps in assessing the historical probability of a price increase.
What is the average magnitude of upward movements? Understanding this helps evaluate if potential gains can offset the option premium.
Where Can You Find Intraday Stock Analysis for NVDA?
To analyze NVDA’s intraday stock movements, historical data is essential. We’ll utilize MarketChameleon’s NVDA intraday stock analysis tool for this purpose. It’s designed to provide deep insights into NVDA’s typical trading behavior. This will assist us in addressing the vital questions raised earlier.
Setting Up The Intraday Analysis for NVDA
To obtain the most relevant statistics for our analysis, it’s crucial to carefully select our data set. We will focus on the last hour of trading, setting our timeframe from 3 to 4 pm. This period often sees significant market activity, making it a critical window for analysis.
Additionally, since our analysis is being conducted on a Monday, we’ll tailor our data to specifically include Mondays’ trading patterns. This day-specific approach allows us to capture any unique trends that might emerge at the start of the trading week.
Remember, while we’re focusing on Monday in this instance, this method can be adapted to analyze any day of the week, offering flexibility in your trading strategy.
We Ran NVDA’s Final Hour Stock Analysis. Here are the results.
Source: Market Chameleon
- NVDA’s Absolute Returns
NVDA’s Absolute Returns show an average move of 0.5% in either direction, roughly $2.52 (using the stock price as of this analysis), illustrating the potential for volatility. The median move is similar, at 0.5% or $2.39.
This data is vital for comparing expected stock moves with expected option time decay.
- Simple Returns
NVDA shows an average increase of +0.1%. This suggests a slight tendency for the stock to gain in the final trading hour.
The historical extremes for NVDA are +1.4% and -1.3%, respectively. This indicates that the stock’s most significant movements tended to be more positive.
Overall, these simple returns suggest that NVDA’s stock behavior leans slightly towards the bullish side, especially considering the skew towards higher peaks in its performance.
- Up vs. Down Moves
NVDA’s average upward movement is +0.6%, while its average downward movement is -0.4%. This difference suggests that NVDA’s upward movements are generally stronger than its downward ones. Such a trend could favor a call option, especially in scenarios of market volatility, due to the higher average magnitude of upward shifts.
- Frequency of Up vs Down Moves
A pie chart illustrates that NVDA stocks dip 55% of the time in the final hour, suggesting that while up moves are generally larger, down moves occur more frequently.
In Conclusion
Our comprehensive analysis of NVDA’s stock behavior in the final trading hour offers valuable insights for traders considering call options. The data reveals a slight average increase in NVDA’s stock price, with more significant upward movements than downward ones, albeit with a higher frequency of declines. These findings suggest a nuanced market behavior: while NVDA shows a tendency towards bullish movements in terms of magnitude, the regularity of downward trends cannot be overlooked.
For traders, this means balancing the potential for higher gains against the prevalent risks of declines. The key takeaway is the importance of a strategic approach, considering both the volatility and the historical trends of NVDA’s stock. As always, while historical data can guide decisions, historical data does not guarantee any future results and it’s crucial to stay informed about current market conditions and broader economic factors that might influence stock performance.
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Originally Posted January 8, 2024 – Are You Considering An NVDA Call Option In The Final Hour Of Trading? Here Are Some Key Benchmarks
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