NVIDIA closed at $176.24 and is currently trading around $176 in pre-market, experiencing a slight decline of -0.14%. Today’s session is focused on NVDA options expiry, which often influences pricing based on implied moves and the actual stock performance. In the last 20 trading days, NVDA’s actual price changes have been smaller than expected in three out of four cases. Around the earnings in August, high implied volatility did not lead to significant stock movement, which benefited option sellers. When actual moves exceeded the implied ones, calmer sessions usually followed, except on September 17 and 18. This indicates more stable price behavior rather than dramatic swings.

Expected NVDA Range

Today, the expected NVDA range, calculated using a 10-day average of implied moves, is approximately between $172.6 and $179.5, which represents a ±2.0% change. Extending this to a 20-day view raises the average to ±2.5% due to earnings adjustments. Key price levels include a developing VWAP of $175.91 and resistance between $177.06 and $177.75. NVIDIA’s strategic capital changes involve investments in Intel and AI infrastructure, showing plans for growth but increasing execution challenges. Efforts in AI and networking are expanding, especially amid US-China tensions that impact growth and policies. Although there is optimism for innovation, mixed news about policies suggests that while dips may attract buyers, significant breakout confirmations are needed, particularly on expiry days. Given that NVIDIA’s actual price moves have been less than the implied moves about 75% of the time recently, strategies that capitalize on this compression are advisable. This trend, where implied volatility is consistently higher than the stock’s performance, points to a favorable environment for selling options premium. This has been observed frequently over the past year, especially between major product announcements. In the upcoming weeks, consider selling covered calls against long stock holdings as NVIDIA nears resistance around $177 to $178. CBOE data shows that the 30-day realized volatility for NVIDIA has been, on average, 15% lower than the implied volatility since Q2 2025, supporting this approach. Selling out-of-the-money put spreads near support around $174.40 could also work if we expect the stock to stay within a range.

News Flow and Strategy

The current news landscape encourages a cautious yet optimistic stance, blending strong AI-related acquisitions with geopolitical risks from US-China trade tensions. Recent reports of the Commerce Department reviewing chip export rules may limit dramatic rallies, making significant breakouts above $180 tough to maintain. These policy concerns should be viewed as catalysts for range-trading strategies, as they may restrict upward price movements. As we approach the monthly options expiration in October, we anticipate dealers will keep the stock around high-volume strike prices like $175 and $180. This supports the idea of fading moves near the edges of the expected range, similar to the dynamics seen in summer 2024, where the stock lingered around key levels for weeks ahead of a major event. While our primary strategy focuses on range trading, we must remain ready for exceptions. Instances where actual moves exceeded the implied ones, such as on September 17 and 18, remind us that significant news can disrupt established patterns. Therefore, purchasing low-cost, out-of-the-money options could be a smart hedge against unexpected policy news or competitor setbacks. Create your live VT Markets account and start trading now.

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