NVDA GEX Analysis and Option Trading SuggestionsKey Observations
1. Put Support:
* A significant put support level is observed at $115, with a high negative gamma exposure of -73.82%. This level is likely to act as strong support due to market makers hedging their positions.
2. Call Resistance:
* Call walls are visible at $125 and $140, with the second call wall at $140 being the strongest resistance due to the higher gamma concentration (65.46%). These levels may serve as barriers for upward movement.
3. Gamma Flip Zone:
* The $120 level appears to be a key pivot point, where the gamma transitions from negative to positive. If NVDA can hold above $120, it may gain momentum toward $125.
4. IVR (Implied Volatility Rank):
* IVR at 69.2 indicates relatively high implied volatility compared to historical levels, suggesting elevated options premiums.
* This high IVR can be leveraged for credit strategies.
5. Implied Volatility (IVx):
* IVx at 73.6 indicates substantial movement expectations in the near term.
Option Trading Suggestions
1. Bullish Scenario:
* If NVDA breaks and holds above $120:
* Trade Idea: Buy a Call Debit Spread.
* Strike 1: $120 (Buy Call)
* Strike 2: $125 (Sell Call)
* Expiry: 1-2 weeks out.
* Reasoning: The goal is to target the next resistance level at $125 while mitigating high IV costs.
2. Bearish Scenario:
* If NVDA fails to hold $115:
* Trade Idea: Buy a Put Debit Spread.
* Strike 1: $115 (Buy Put)
* Strike 2: $110 (Sell Put)
* Expiry: 1-2 weeks out.
* Reasoning: Targets the next support at $110, aligning with put gamma walls.
3. Neutral Strategy:
* For range-bound movement between $115 and $125:
* Trade Idea: Sell an Iron Condor.
* Sell Put: $115
* Buy Put: $110
* Sell Call: $125
* Buy Call: $130
* Reasoning: Capitalizes on elevated IV while limiting risk.
Thoughts and Insights
* Momentum Assessment: NVDA's ability to hold $120 is critical for a bullish continuation. If it fails, the focus shifts to $115 as the next support.
* Volatility Expectation: Elevated IV suggests potential for sharp moves; however, premium collection strategies can be lucrative.
* Key Levels to Monitor:
* Support: $115, $110
* Resistance: $120, $125, $140
Disclaimer:
This analysis is for educational purposes only and does not constitute financial advice. Always perform your own due diligence and risk management before trading.
