NVDA Trade on Jul 15, 2021 15:53 from Marius: Tradervue User Stock Trades.

First week of 2Q earnings with banks reporting. Some broad market selling price action seen in the ticks and across risk-on assets and some bids in risk-off assets. Corporate news and sentiment pivot set-ups for binary catalyst still providing pockets of opportunity. Big picture, markets have seen to be pricing in peak reflation + inflation data as more economic reports roll out and now further pricing in as monetary policies are reviewed and with corporate earnings.

Fundamentals In Play Analysis

Nvidia has been a leader in the growth sector rotation trade in the markets the last 2 months. It had announced the 4/1 stock split May 21st and had a positive ER on May 25th. The stock will trade on a split adjusted basis on July 20th which is also currently trading similar to a sell the news/known event. Taiwan Semiconductor Manufacturing Company also reported positive earnings with notable profit taking reaction. SMH is also seeing weakness implying overall sentiment in the semiconductor industry which is also part of the recent growth rotation. TSM and NVDA are also the top two holdings in SMH with a combined weight of 24.08%. Earnings is scheduled August 18th.

Quantitative Analysis

Intraday Fundamentals

RVOL 1.43
AVOL 9.58
ATR 21.49
Beta 1.35
Volatility 2.74% 2.71%
Short Float 1.34%
Shs Float 597.94M
Inst Own 67.50%
Market Cap 469.16B

Options Statistics + Tape Reading + Order Flow + Dark Pool Levels

SI 1.744
IV 48.99%
IVP 48%
P/C 0.707
VWAP 468.839

Noting the call volume at the B with almost half of them done on at 0-20 delta implying call writes with higher conviction.

OF 100k+ with notable A puts. Also an ISO order with sweeps at the opening bell.

Expiry week B/BB with more emphasis on the call side implying shorter-term downside conviction.

Orders at B/BB 1M+. Notable shorter-term bearishness but longer-term contract golden sweep highlighted in yellow. The shorter-term order flow still overweights the current momentum but keeping the longer-term as a data point for the future.

Another notable golden sweep in the mid-term at A with a 765 strike. Possibly a key level around earnings. Still more data outside of this timeframes trade but noting. The company is a market industry leader.

Daily order flow to gauge current days sentiment. Call premium is still higher but it is seen above that calls were written.

DP level at 814.18 for this week. 488,737 volume at a NV of 397.92M.

Options Positioning

OI 5798/7112
VOL 5895/5683
Delta .01/.01
Theta -.10/-.07
Vega .01/.01
Gamma .00/.00
Prob T 2.10%/1.06%
Prob ITM 1.04%/0.53%
MMM +/- 16.473
IV Series 39.48%

Positioned at the HTF back side daily LH. This is what made sense to me at the time of the trade and in-line with similar trades. Anticipated an event where buyers regained controlled the following session in the market leading stock.

Technical Analysis

HTF momentum breakdown on elevated RVOL on the BID + close LOD. IV is rising causing premiums to rise and indicating higher volatility priced in the near-term.

Back side short setup and sellers in aggressive control below 800. VPOC breakdown into next VPOC area of 750. AVWAP at 735.91 below and a potential bounce bid level. 814.18 DP level noted above where notable overhead supply is also around a VPOC area. AVWAP pivot high also shown as a confluence area.

Trade Risk + Position + Size + Allocation Management & Review

Considering this now as an (A+) playbook setup and will size up accordingly in similar trade variables. This is in line with the SPCE trade earlier in the week which I also noted. Execution was (B+) because there is room to improve and show in a future trade. This may be a new theme/market regime in progress in 2Q. I need to recognize the development prior to the trade and the market participants conviction + sentiment + pivot. Capital allocation was 25% as this was a scalp trade and inline with progression plan.