Wednesday’s Vital Data: Nvidia Corporation (NVDA), Tesla Inc (TSLA) and Wal-Mart Stores Inc (WMT)

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U.S. stock futures are edging lower this morning, as Wall Street prepares for minutes from the latest Federal Open Market Committee meeting. Furthermore, there’s a bit of growing trepidation in the air, with stock near all-time highs and third-quarter earnings season about to kick off in earnest.

Wednesday’s Vital Data: Nvidia Corporation (NVDA), Tesla Inc. (TSLA) and Wal-Mart Stores Inc (WMT)Against this backdrop, futures on the Dow Jones Industrial Average are off 0.03%, S&P 500 futures have slipped 0.07% and Nasdaq-100 futures have faltered 0.07%.

In the options pits, volume rebounded slightly on Tuesday, with about 12.9 million calls and 10.7 million puts crossing the tape. On the CBOE, the single-session equity put/call volume ratio plummeted to 0.52, driving the 10-day moving average lower to a one-month low of 0.62.

Drilling down on Tuesday’s volume, Nvidia Corporation (NASDAQ:NVDA) was flooded with call options activity after the company took the wraps off its new Drive PX Pegasus platform, designed for Level 5 autonomous vehicles. Next, Tesla Inc (NASDAQ:TSLA) drew a smattering of call activity after Morgan Stanley boosted its price target on the stock. Finally, Wal-Mart Stores Inc (NYSE:WMT) projected a 40% surge in online sales and announced a $20 billion buyback plan.

Wednesday’s Vital Options Data: Nvidia Corporation (NVDA), Tesla Inc. (TSLA) and Wal-Mart Stores Inc (WMT)

Nvidia Corporation (NVDA)

Nvidia stock broke out to new highs yesterday after the company unveiled its new Drive PX Pegasus platform. The new high-end chip is designed to give Nvidia a huge leap forward in autonomous driving, with the platform capable of supporting a fully self-driving vehicle. Nvidia expects the the Drive PX Pegasus platform to make its debut in the first in driverless robotaxis, with more than 25 partners working toward that goal.

Options traders loved the news, sending more than 233,000 contracts across the tape for NVDA stock. What’s more, calls made up a whopping 70% of yesterday’s volume. The spike in call activity marks a shift in Nvidia sentiment.

Currently, the October put/call open interest ratio rests at a lofty 1.01, as short-term speculators have favored puts over calls in recent weeks. Peak October put OI totals over 6,800 contracts at the deep out-of-the-money $165 strike and, if these contracts weren’t sold, they might as well be written off at this point. Peak October call OI, meanwhile, numbers over 8,000 contracts at the in-the-money $180 strike.

Look for more bulls to join the bandwagon as NVDA continues to defy the bulls and trek higher.

Tesla Inc (TSLA)

Miss your production targets for your new blockbuster vehicle? That’s apparently no problem for Tesla at this point. On Tuesday, Morgan Stanley boosted its price target to $379 from $317 with an “equal weight” rating. The ratings firm lifted its stance based on Tesla’s continued build out of charging stations, citing this as the biggest bottleneck for acceptance of the company’s electric vehicles.

TSLA options traders were not quite as enthused as Morgan Stanley. Volume on Tuesday came in at 156,000 contracts, just shy of average for TSLA options volume. Furthermore, calls only made up about 57% of yesterday’s activity.

That said, pessimism is nothing new among TSLA options traders. Currently, the October put/call OI ratio rests at 0.90, with calls only narrowly outnumbering puts among front-month options.

That said, TSLA bulls aren’t shy about setting lofty goals. Currently, the October $400 strike sports some 3,437 contracts, with another 3,500 contracts open at the $370 strike. Both strikes are currently well out of the money, with the $400 strike looking particularly ambitious at the moment.

Wal-Mart Stores Inc (WMT)

In a shocking turn of events, WMT is suddenly looking like a growth stock. The company said on Tuesday that it expects online sales to surge 40% next year, bolstered by the addition of 1,000 online-grocery locations to allow customers better access to buying food on Walmart.com. And if that wasn’t enough, Wal-Mart said it has approved a plan to buy back $20 billion in shares in fiscal 2019.

WMT options traders jumped at the chance to speculate, sending a sizeable 140,000 contracts across the tape — nearly quintupling Wal-Mart’s daily average. Furthermore, the bullish bandwagon was bursting at the seams, with 72% of the day’s take made up by calls.

Finally, there is plenty of pessimism to work off, as WMT’s October put/call OI ratio rests at a lofty 1.10, with puts still in command over the short term.

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/2017/10/wednesday-vital-data-nvidia-corporation-nvda-tesla-inc-tsla-wal-mart-stores-inc-wmt/.

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