That has been a tradable phenomenon in NVIDIA Corporation. The personality of this bull market is one that shows optimism before earnings - irrespective of the actual earnings result. So, owning 10 calls is more risky than owning 10 call spreads because there is less capital at risk.īull markets have quirks, or personalities if you like.

Also note that this is only 'less risk' if size is the same by contract. Here are the results over the last three-years in NVIDIA Corporation:įor the record, it also has 11 wins and 1 loss over the last 3-years ( Back-test link), just like the naked long call. Now, unlike many of our other set-ups, this is in fact a straight down the middle bullish bet - this absolutely takes on directional stock risk, so let's be conscious of that before we see the results, because they are mind bending. Here's the set-up in great clarity again, note that the trade closes before earnings, so this trade does not make a bet on the earnings result. Let's look at the results of buying a monthly call option in NVIDIA Corporation 7-days before earnings and selling the call one day before the earnings announcement. The Options Optimism Trade Before Earnings in NVIDIA Corporation The premise is simple - one of the least recognized but most important phenomena surrounding this bull market is the amount of optimism, or upward momentum, that sets in the week before an earnings announcement. You can stay up to date on this news by looking to Nvidia's investor relations site. We see a projected date of 8-10-2017 for Nvidia earnings, but that date is not confirmed. But, after we look at this trade, we have a wrinkle which has made it even better for those looking to take less risk. Over the last two-years it has won 8 times and never lost. The strategy won't work forever (it really won't), but in the last 3-years it has won 11 times and only lost once. It's historic rise has come on the back of legitimate fundamental growth, but for now, we want to focus on momentum, and there is a fascinating pattern that has emerged. If ever there was a momentum stock, Nvidia fits the bill. There is a powerful pattern of optimism and momentum in NVIDIA Corporation (NASDAQ:NVDA) stock right before of earnings, and we can capture that pattern by looking at returns in the option market.

Nvda earnings date 2017