NVDA Earnings Vol Trades
Retail giga tech gamma party rages
It’s giga tech gamma roulette. It doesn’t matter now if it’s Thursday or Friday, they just pick a round strike and sweep the calls at the open. Today it was GOOG, look at the call volume out of the gate that yanked the underlying higher as dealers bought to hedge short calls:
Now, it most certainly pays to keep abreast of the events on the tech calendar, these days provide aircover for this kind of price action, since folks don’t want to sell before the news the comes out of them, and anything positive has folks chasing/algos getting longer:
https://www.techmeme.com/events
Now, retail is just throwing money around like drunken Lindsay Lohans. I mean, how about setting records for buy imbalances on Monday, and this is after heaving record cash at the market in April:
And call skews are reflecting the FOMO/PTspikeD/right tail fear/institutional investor underperformance chase, as the demand is there for longer dated calls, yes, some folks like stuff that doesn’t pay hundreds of percent by noon; here are one month skews, clearly QQQ is where the action is, and those are the names where everyone expects the May-July annual autoramp:
And, even with opex behind us, there is large open interest above the market for end of month and quarterly opex, so dealers are still constantly needing to hedge moves higher:
And, if you want to imagine where the right tail fear is coming from, let’s revisit my QQQ seasonal chart with a couple annotations:
This daily QE pattern of the open to exactly 1pm is getting ridiculous:
So, without news the next event is obviously next Thursday. And yesterday in the chat I highlighted May 30th/June 13th put $128/126 put diagonals for .60ish:
This would work perfectly if they sell it down again off the news like February after the automatic beat and raise and all the good tidings that are imminent.
An alternative to this for less margin