How to use the performance period for options trading
Implicit changes in options are the magnitude of price changes expected by the market on a stock's performance date. Market traders can infer the value of an option by referring to implied changes. Furthermore, by reviewing the stock's past stock price performance on the performance date, it is also possible to determine its specific trading pattern or rise or fall situation.
Volatility options strategies
When options are overvalued, arbitrage can be carried out based on short-term fluctuations in IV Crush if the stock price is still within the expected range. Common short-term volatility strategies include the Iron Eagle strategy, the sell cross strategy, and the sell wide span strategy.
Results release date: May 22 after the market
Performance forecast: FY2025 Q1 revenue of US$24.572 billion, up 241.65% year on year; earnings per share of 5.19 yuan, up 533.5% year on year
Nvidia's current implied change is ± 9.7%, indicating that the options market rose or fell 9.7% in a single day after betting on its performance, and the current option value is slightly undervalued. The stock had an average change of ± 7.4% over the past 12 performance days, and the probability of increase reached 67%; among them, the most volatile gains and losses were +24.4% and -7.6%, respectively. The previous four performance days all closed higher on three times, closing at +24.4%, +0.1%, -2.5%, and +16.4%, respectively.
In terms of options transactions last Friday, Nvidia's bullish ratio continued to be high at 58%, but the induced volatility has declined recently and is currently at the 77% percentile for the year. When the stock price was 921.5 US dollars, some large investors bought calls that expired on December 18, '26 and had an exercise price of 900 dollars, and at the same time sold calls with the same expiration date and exercise price of 1,000 US dollars, using a bullish bullish option spread strategy. This strategy is moderately bullish; at the same time, there are also large companies that sell false forward value puts that expire in 26 years, involving a capital amount of more than 100 million US dollars.
Analysts believe that this financial report should focus on three points. First, will Nvidia's performance exceed expectations, and what is the profit margin trend? The second is the production capacity of the newly launched Blackwell architecture, and finally, will the growth rate of demand slow down when the GB200 and the previous generation of chips are replaced?
Jefferies analyst Blayne Curtis (Blayne Curtis) said that when discussing Nvidia recently, investors wanted to know if demand would accelerate as customers prepare for the launch of Blackwell. Bank of America analyst Vivek Arya (Vivek Arya) is slightly cautious, believing that Nvidia's stock price may “fluctuate” in the short term, partly due to “the risk of performance deceleration before Blackwell's supply.”
2,$Palo Alto Networks (PANW.US)$
Results release date: May 20 after the market
Performance forecast: Q1 revenue of USD 1,967 million, up 14.3% year on year; earnings per share of USD 0.42, up 36.77% year on year
The current implied change of Palo Alto Networks is ± 10.2%. In comparison, the average change in the stock price of the previous four quarter results reached 14.1%, and the current option value is undervalued. There is a high probability that the stock will rise in the past 12 performance days, reaching 83%. The stock price fell only on the first two performance days (-5.4%, -28.4%); the rest were all rising.
Results release date: May 22 pre-market
Performance forecast: Q1 revenue of 76.558 billion yuan, up 103.41% year on year; earnings per share of 9.66 yuan, up 74.13% year on year
Pinduoduo's current implied change is ± 9.9%. In comparison, the average change in the previous four quarter earnings days reached 14%, and the current option value is undervalued. The stock has a high probability of rising in the past 12 performance days, reaching 67%; the stock price closed up across the board on the last four performance days, and three of them closed sharply higher, closing at +19%, +15.4%, +18.1%, and +3.5%, respectively.
Judging from the volatility bias, market sentiment is slightly bullish on Pinduoduo. Pinduoduo's options trading volume surged nearly threefold from the 30-day average last Friday. The bullish ratio reached 68.3%. There were many pre-performance call orders. The call volume due on March 21 next year, and the trading volume of calls with an exercise price of 160 US dollars is high, with a high volume of 10,000 and 60,000, respectively.
Looking ahead to first-quarter results, Bloomberg analysts expect Pinduoduo's online marketing and other revenue to increase more than 38% year over year, and trading services revenue to increase 267% year over year. However, looking at impressive year-on-year data, Bloomberg expects revenue from its two main businesses to decline month-on-month, with online marketing and other revenue falling 22.7% month-on-month, and transaction services revenue falling about 5% month-on-month.
How to easily enjoy the performance period? Futu Options tools help you!
>>Make good use of volatility analysis to determine the level of option valuation!
>>Options calculator to calculate the theoretical price of future options
Disclaimers
This content does not constitute an offer, solicitation, recommendation, opinion or guarantee of any securities, financial products or instruments. The risk of losing money when trading options can be extremely high. In some cases, you may lose more than the amount of your initial deposit. Even if you set backup instructions, such as “stop corrosion” or “limit price” instructions, you may not be able to avoid losses. Market conditions may make such instructions unenforceable. You may be asked to deposit an additional security deposit within a short period of time. If you fail to provide the required amount within the specified time, your open positions may be closed. However, you are still responsible for any shortfall in your account as a result. Therefore, you should study and understand options before trading, and carefully consider whether this type of trading is suitable for you based on your financial situation and investment goals. If you trade options, you should be familiar with the procedures for exercising options and when they expire, as well as your rights and responsibilities when you exercise options and when they expire.
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