Comment by NewCzech
20 hours ago
He doesn't really address his own question.
He's answering the question "How should options be priced?"
Sure, it's possible for a big crash in Nvidia just due to volatility. But in that case, the market as a whole would likely be affected.
Whether Nvidia specifically takes a big dive depends much more on whether they continue to meet growth estimates than general volatility. If they miss earnings estimates in a meaningful way the market is going to take the stock behind the shed and shoot it. If they continue to exceed estimates the stock will probably go up or at least keep its present valuation.
I've been selling options for almost a decade now, including running trading algorithms, and was laughing a bit to myself because it was basically just the math in an everyday option chain. As you already know, anyone can look at the strike they are talking about, with the IV already cooked into it, on platforms like Think Or Swim or even Yahoo Finance. Some of the stuff can be pretty useful though in backtesting and exploration.
All that aside, I'm impressed it made it to the HN front page.
> Sure, it's possible for a big crash in Nvidia just due to volatility. But in that case, the market as a whole would likely be affected.
Other way around: if NVidia sinks, it likely takes a bunch of dependent companies with it, because the likely causes of NVidia sinking all tell us that there was indeed an AI bubble and it is popping.
Indeed, the market as a whole would be affected. But is not NVIDIA more of a software company than a hardware one? This bugs the shit out of me.
They are maintaining this astronomical growth through data centers margins from the design of their chips and all of that started from graphics related to video games.
> But is not NVIDIA more of a software company than a hardware one?
No? That’s why they have almost no competition. Hardware starting costs are astronomical
But the actual manufacturing foundry is TSMC no? And they create the whole software environment based on their chips.
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