Nvidia Bullish Bets Surge as Options Traders Eye Strong Earnings Rally

Joining us to break down how to navigate this market is Bob Lang, Founder & Chief Options Analyst at Explosive Options.

Great to have you here.

Thank you so much for joining me.

Great to see you, Remy.

Well, you and I were talking about the Knicks after yesterday's performance here.

So here we are on Nvidia Day, and there is a lot happening on the surface and below the surface.

So when it comes to options, give us the lay of the land.

So as far as options are concerned, we've been seeing over the past couple of weeks some really brisk call buying in Nvidia options.

In fact, probably to the tune of about 4 to 1 calls versus puts.

And what does that mean?

It means basically people are getting very bullish on Nvidia.

When you take a look at the stock, it's sitting around 220 to $222 a share right now.

People are very bullish at looking for Nvidia, Remy to get out to.

35 $240 even out to the $250 level over the next 3.5, 4 weeks.

I saw a lot of brisk action in the $240 and 245 calls being bought for June, June 18th.

Those expire.

So we're talking about to 4 weeks.

And this means that some big money is really placing a bet that this earnings report is going to be good and the stock is going to move.

Bob, we're all counting down to the closing bell for that earnings report and apparently if you're going to Nvidia earnings party after the closing bell and you're here in New York and you watch the Knicks yesterday, of course it's going to be another long evening potentially, but I do want to zoom in on a name in the tech sector so arm holdings it does face a lot of competition as well as the regulatory.

Overhang here.

So what is your take on ARM right now?

Love ARm Holdings, and I think that a positive report from Nvidia is going to have some collateral moves for some of these names like Marvel, AMD, Intel, and especially ARM, and Taiwan Semi TSM.

But I particularly like ARM Holdings because their business has been out the window.

I mean they came out with a strong earnings.

A couple of weeks ago, Nvidia has talked about using Arm Holdings as well too.

I noticed this morning stock is up almost 10% today, up to about $247 a share, new all-time high for Arm Holdings.

Of course they have the backing of SoftBank, as a big Japanese holding company, is a big investor in Arm Holdings.

So I think that.

I'm sorry to do this.

ARM has some legs to the move up to maybe about $300 a share, $247 right now, so about a 20% move to the upside, seeing some good option call volume in the 250 and 270 call strikes out to July.

Now those are a little bit more expensive, got a little bit more time left on those options, but still, somebody is getting very bullish on arm holdings to get up to those levels.

Bob, I do want to take a step back and take a look at what we're seeing here in the US in terms of inflation and energy prices.

So it goes without saying that all of us are keeping our eyes on the pain at the pump.

That summer driving season is right around the corner.

Hard to believe.

But when we talk about one energy name in particular, which is Phillips 66, they do face a geopolitical.

Tailwind here.

So tell us about this name.

So I love Phillips 66 and PSX is the symbol, and this was a spin-off from some years ago of ConocoPhillips, and ConocoPhillips is still around, but Phillips Phillips 66 is the refiner arm of that very large conglomerate company, and I think that that name along with Valero is another name that's been very, very strong.

Hit almost new all-time highs, but as we move into the driving season and shortages start coming up, these companies are going to be able to have the pricing power to raise prices on consumers.

It's not going to feel good when you have to go to the gas tank and fill up at 45 $6 a gallon, but still, these companies are pretty much shielded from.

From downside and especially Philips 66, I think that this company since it got spun off some years ago has been super strong.

We've seen some good option volume as well on this name out to September.

So of course September is important because that's Labor Day weekend.

That's pretty much the end of summer.

But here we are entering summer.

I think people are going to be Filling up their tanks if they don't have a Tesla, of course they're going to be filling up their tanks with gas and traveling along, and I think Phillips is going to be a huge beneficiary of that.

And Bob, we have less than 60 seconds here.

So very quickly, your take on volatility.

I think volatility is here to stay, Remy.

I think over the next couple of months, there's a lot of uncertainty.

We don't have a conclusion yet for this war in Iran.

We have higher oil prices.

We've had $100 oil on average for the past six weeks, and that's painful for people.

At the pump and not just for that, but also for a lot of companies use oil as an energy as an input and so costs are rising and we see that in the CPI last week.

We saw that in the PPI last week and we're seeing it in the bond market as well too.

We're seeing yields starting to rise.

The tenure is moving up towards 4.7%, and a lot of people think it's going to get to 5%.

And it's reflecting the higher inflation that is coming into the economy right now.

Fortunately, earnings have been very, very strong for most of the companies here.

The economy has been pretty resilient, so we'll see, we've got.

Clashing forces right here.

We've got inflation on the one hand.

We've got strong earnings on the other.

We don't know which is going to win, but we'll see what happens.

Well, Bob, we will have to wait and see.

So I appreciate you weighing in and thank you so much for your time today as well as your perspective.

Great to be with you.

Thank you so much, Bob.

Thank you.