A large bullish position is being extended in Nvidia.
optionMONSTER's market scanner shows that about 4,300 April 37 were purchased for $0.43 to $0.52 yesterday. This represents fresh buying, as volume was well above the strike's open interest of 1,558 contracts.
This follows a winning trade in the April 33 calls cited about two weeks ago on our InsideOptions Pro subscription service. Those contracts more than doubled in value and were rolled higher to the May 37 calls on Wednesday.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
NVDA fell 0.36 percent to $35.63 yesterday. The graphics-chip maker gapped up from below $28 after reporting positive results on Feb. 17 and is up 14 percent in the last month. Its next earnings report is estimated for the post-market on May 5.
Overall option volume was about average in NVDA yesterday, but calls outnumbered puts by a bullish 5-to-1 ratio.
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