Options Corner: NVDA, WDC, AA

0:00Soptions Corner is here, right, and every day here on the show, Tom White joins us and he looks at real unusual options trades that he's seen throughout the day and does some Analyzation of those Tom White hosted fast market here on show of network is checking out of course in video We talked so much about Nvidia and Marvel But just the fact that the word photonics is back up again and look at the bid what we're seeing in the NASDAQ with it up nearly 3% today some of your thoughts on Nvidia here Yeah, finally kitten a catch and a bid back above that 170 level up about 4% today Was up over 5% earlier, but still down about 7% So far this year and off about 17% from those all-time highs that we saw last October It's been in consolidation phase between about 170 and 195 over the last several months here But now trying to bounce off of those multi-month lows that we saw Just at the end of last week and into yesterday's close

1:00So some positive news today the two billion dollar investment into Marbel technologies as They're trying to continue to leverage This roundabout type of cycling of investing in different companies So they can sell more of their GPUs and more of their technology everybody wants to be in this Nvidia ecosystem moving forward And I think that's why Nvidia who has a lot of free cash flow Is putting that out there and today was Marvel's turn and that stocks doing well Everybody has questions around the valuation Which if you think about it on a forward PE prior to today Nicole Before PE on Nvidia, which has 70% revenue growth year over year Was about the same as the S&P 500 as a whole which doesn't grow at 70% year over year So a lot of people expecting better things after the GTC conference some positive commentary Out of CEO Jensen Wong also

2:02So we'll continue to see if this rally can hold I think that 170 level is going to become a big area of support But we did see some bullish activity and this was really early Before we saw the massive pop in the stock Out in the April 17th monthly options that expire in 17 days trader bought 10,000 Of the 18190 strike call spread Here they paid an average debit of about a buck oh five on this $10 wide bullish call vertical That takes the break even up to 181.05 over the next two and a half weeks That's only about 5% above the current chair price in Nvidia So buying a cheap vertical, you know you you cap some of your gains on this one But is Nvidia really going to go above 190 over the next two and a half weeks Most likely not the probabilities are against that But yeah, bought a cheap call spread here for some upside exposure over the next two and a half weeks Yeah, and I like that Analyzation that you talk about the EP of something like in video which is growing versus that of the S&P 500

3:07It certainly is um like you said sort of apples are oranges at that point Let's talk about western digit a lot of love here For this name the groups been hot. How about the bullish call that you found here on western digital Yeah, getting a nice pop today And this is on the back of that Bernstein upgrade today They're pretty to outperform from market form they put a price target at 340 and that's up from about 170 So they may be at missed part of the rally to begin with But we did see that drawdown Last week and that was based on the fact that um You know and throp it came out with something in uh, you know As far as the memory space Google alphabet came out with something their turbo quant uh, that was kind of pushing back against Some of these memory chip makers Even though I mean if you take a look at it this talks up over 550 percent over the last 12 months Still up over 50 percent so far just this year So re-igniting maybe the rally that we've seen in this name

4:09management Emphasize on their last earnings event a few weeks ago That they continue to see robust demand for you remember This is the hard disk drive uh, memory aside of the business so not as much exposure to flash DRAM As much as maybe micron or somebody others in this space they still have a big stake over seven percent stake in sand disk also which they spun off sold a bunch of that That allotment that they had but they still own over seven percent of sandisk which is having a nice rally also But we did see some bullish activity in here also and this was all the way out in the uh, April 24th weekly options So about 24 days to expiration trader bought over four thousand Of the April 24th weekly the three fifteen strike calls paid an average debit of about six dollars and seventy cents for these calls So the break even where this trader starts to profit is above three twenty one seventy over the next three and a half weeks That's about 21 percent above the current share price. It would be a new

5:11Record high if it gets above that break even also If if this bullish trade works out for this trader, but yeah three and a half weeks in this position But this trader thinks there's more upside from the already astronomical gains that we've seen over the last 12 months This is a brubbier eyes moment. I mean, I'm looking at this and I just can't believe it's up over five hundred and fifty percent year of year So if you if you try and scratch your head folks, Tom probably has 20 of them in his head So I'm asking Tom But if you ask 20 people, you know to name any stock that's up over five hundred percent in one year That's pretty hard to think of and this one just blew it out of the water and not only that but also From 24 dollars. I pulled up a three-year chart Just three years ago and the high was 319 and we're not that far off from it And as you noted that new price started from Bernstein's at 340 which is above the high so we will see if we get there All right, aluminum has been hot

6:13Alcoa's that used to kick off earnings season for us now it's financials. Yeah, let's talk about bullish alcoa trade you found Yeah, I remember those days also Nicole waiting for alcoa to report because it was always the first one That but that was years ago. Yeah, stocks up up 4% today 12% so far this week 24% on the year. It's near four-year highs in the stock and this is all based on the fact that you know this Glut in the state of Hormuz where you know tankers aren't going through not only affects the oil and the energy markets Look for next natural gas, but also we talked about the fertilizers now Also become an issue in the conflict in the Middle East with aluminum right alcoa They there was a couple of attacks in the Middle East on a couple of refineries for aluminum That sent prices skyrocketing that sent alcoa and a couple of the other names in the space skyrocketing also And what's that going to do to pricing moving for that's going to probably be a benefit for alcoa and that's why you've seen

7:18The rally in the stocks removing a significant portion of low-cost supply That's increasing the probability and strategic value of alcoa's production assets across the globe So those aluminum prices start going higher due to that reduced capacity That's a benefit for alcoa, but we did see some bullish activity in here also and this was all the way out in the June monthly options So about 79 days to expiration a trader bought over 2500 June 80 strike calls paid in average debit just under four bucks for these So the break even just under 84 dollars to the upside Over the next basically two and a half months is about 28 percent above the current share price in there So you need a big monster move in alcoa to get above that, but remember You know these conflicts can create you know shock moves and individual names And the commodities that they're based off call volume about double normal daily average volume that we've seen over past by trading days

8:19And we've seen a lot of volume over the past five days because These issues have just arisen over the last week or so So yeah, this trade of things that we're going to see more gains and you need a 24 percent gain to get above that break even And look, I mean they were talking about what a vertical company this is how it starts from the supply chain It actually mines and then the raw material goes in and they refine it into a aluminum power and smelters and that Even when things are going wrong abroad or you know in the middle east in this case We're 9 percent of the global production actually is happening and some of it's being stopped in the state of hormones It doesn't affect a name like alcoa other people are watching century Aluminum as well, which is a little different, but also has some up arrows on the news. Thank you Tom. Wait. Thanks. Great to see you You