OptionsDesk's Sebastian Blanco discusses the upcoming earnings report from NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) and the broader tech sector's volatility in an interview with Proactive's Stephen Gunnion.
Nvidia, known for inventing the GPU in 1999, has seen its shares increase by over 50% in January and 23% last year, transitioning into a full-stack computing infrastructure company. The company is set to report its fourth-quarter end-of-year revenues, anticipated to be $20.5 billion, up from $18.5 billion in 3Q, potentially exceeding expectations. However, much attention is focused on Nvidia's future guidance amid high volatility levels, with the company's shares experiencing significant trading activity. Nvidia has surpassed Tesla as the most actively traded single share on the options market, with traders expecting a substantial share price swing around the Q4 earnings announcement.
The tech sector's volatility, exemplified by the shares of Super Micro Computer surging and then significantly dropping, is a concern for investors. Supply-side constraints and demand outstripping supply are key issues.
To protect portfolios against such volatility, Blanco suggests a 'protective put' spread strategy, which involves buying and selling puts at different strikes as an insurance policy against potential losses.