Monday’s Vital Data: Nvidia Corporation (NVDA), Snap Inc (SNAP) and Alibaba Group Holding Ltd (BABA)

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U.S. stock futures are surging this morning, as geopolitical tensions between the U.S. and North Korea have taken a back seat to domestic terrorism Stateside. Over the weekend, Secretary of Defense James Mattis and Secretary of State Rex Tillerson pushed diplomatic solutions to the conflict. Meanwhile, domestic issues rose to the forefront following violence at a white supremacist rally in Charlottesville, Va.

Monday’s Vital Data: Nvidia Corporation (NVDA), Snap Inc (SNAP) and Alibaba Group Holding Ltd (BABA)With nuclear threats off the table for now, Wall Street is breathing a sigh of relief. At last check, Dow Jones Industrial Average futures had jumped 0.44%, Nasdaq-100 futures had gained 0.6% and S&P 500 futures were leading the way with a rally of 0.53%.

On the options front, puts were once again at the forefront of Friday’s activity. Overall, about 16.6 million calls and 20.4 million puts changed hands. Meanwhile, the CBOE single-session equity put/call volume ratio vaulted to 0.94, its highest perch since mid-April. Meanwhile, the 10-day moving average soared to 0.75 — its loftiest reading since just before the November elections.

Drilling down on Friday’s options activity, Nvidia Corporation (NASDAQ:NVDA) drew mixed options activity as NVDA stock plunged more than 5% despite the company posting solid second-quarter earnings. Elsewhere, Snap Inc (NYSE:SNAP) drew heavy put volume in the wake of its second abysmal quarterly report since going public. Finally, Alibaba Group Holding Ltd (NYSE:BABA) call volume continues to ramp up ahead of the company’s fiscal first quarter report this Thursday.

Monday’s Vital Options Data: Nvidia Corporation (NVDA), Snap Inc (SNAP) and Alibaba Group Holding Ltd (BABA)

Nvidia Corporation (NVDA)

Nvidia released its second-quarter earnings report after the close on Thursday, and received naught but concern for what was a stellar fiscal performance. For the quarter, Nvidia said it earned 92 cents per share on revenue of $2.23 billion, blowing past Wall Street’s expectations on both fronts. What’s more, Nvidia guided to third-quarter revenue of $2.35 billion, better than the consensus estimate for $2.14 billion.

And yet, NVDA stock sunk more than 5% on the news, as concerns about the sustainability of such growth plagued the shares. This thread of negativity spilled over into NVDA’s options trading as well, as puts made up 45% of the more than 431,000 contracts traded on the shares.

Furthermore, NVDA options traders are looking for follow-through selling pressure for the shares, as the September put/call open interest ratio currently rests at 1.22, with puts outnumbering calls among back-month options. Peak put OI of roughly 8,000 contracts for the series puts the downside target near $150 for short-term speculative traders.

Snap Inc. (SNAP)

Fool me once, shame on you. Fool me twice? It’s time to sell. Shares of Snapchat parent Snap Inc were battered for a loss of more than 14% on Friday after the company offered up its second abysmal fiscal report since going public. Snap said it lost 36 cents per share, more than doubling Wall Street’s expectations for a loss of 15 cents. Revenue was also weak, coming in at $181.7 million versus targets for $189.2 million. Even user growth was slow, with Snap adding a mere 7.3 million in the quarter.

It’s no surprise, then, that put options dominated SNAP’s post-earnings activity on Friday. Volume topped 264,000 contracts, with puts making up 58% of the day’s take. And it wasn’t just short-term earnings speculators getting in on the action, as SNAP’s September put/call OI ratio rose to a bearish reading of 1.30 following the influx of put action.

SNAP options traders expect selling to continue for the next several weeks, as peak put OI for the September series totals more than 7,000 contracts at the $11 strike, hinting at expectations for SNAP to trade in single-digit territory before long.

Alibaba Group Holding Ltd (BABA)

Alibaba is set to step into the earnings limelight before the open this Thursday, and options traders are gearing up for another bullish performance. Volume for BABA stock options rose to almost 226,000 contracts on Friday, with calls snapping up 67% of the day’s take. Implieds are pricing in a potential post-earnings move of nearly 7% for BABA stock, with the upper bound at $163.56 and the lower bound currently at $142.44.

As for expectations, the consensus is looking for a profit of 91 cents per share on revenue of $7.06 billion.

In the same quarter last year, Alibaba earned 73 cents per share on revenue of $4.79 billion. Expectations may be higher, however, as EarningsWhispers.com puts the whisper number at a profit of 96 cents per share.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/monday-vital-data-nvidia-corporation-nvda-snap-inc-snap-alibaba-group-holding-ltd-baba/.

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