Observing Short-Dated Option Activity
$NVDA$
This week marks the launch of Monday and Wednesday weekly expiry options. For these new short-dated contracts, we'll observe for a week before formulating strategies.
Overall, NVDA's price is expected to remain below 195 this week. Institutions continue selling the 195 call $NVDA 20260206 195.0 CALL$ , hedged by buying the 200 call $NVDA 20260206 200.0 CALL$ .
The lower bound is more nuanced. 170 remains a potential target, but stability around 190 cannot be ruled out.
Analyzing open interest for the Feb 2nd and Feb 4th expiries suggests the possibility of a minor pullback in NVDA following earnings from AMD or Google.
$AMD$
The rise of agentic AI is driving server CPU growth, with AMD positioned as a beneficiary of this shift.
Institutions' spread strategy for this week involves selling the 252.5 call $AMD 20260206 252.5 CALL$ and hedging by buying the 262.5 call $AMD 20260206 262.5 CALL$ , indicating expectations that earnings won't surpass the previous highs.
Based on volatility calculations, the lower bound expectation is around 225. Sell put strategies can consider strikes below 225.
$MSFT$
At first glance, there were two large call orders: $MSFT 20261218 575.0 CALL$ and $MSFT 20261218 625.0 CALL$ . However, these same options saw activity on Thursday as part of a spread: selling the 575 call and buying the 625 call, with over 200,000 contracts—a massive bet. The trader expects MSFT will struggle to rebound to its previous highs this year, suggesting limited upside, at least for the first half.
Recently, 430 has acted as support, but a further pullback to 400 is possible. For those considering selling puts, it's advisable to wait a couple of weeks.
$TSLA$
Institutions are selling the 447.5 call $TSLA 20260206 447.5 CALL$ and buying the 467.5 call $TSLA 20260206 467.5 CALL$ as a hedge.
This week is expected to see low-level consolidation, with support at 400. Consider selling the 380 put: $TSLA 20260206 380.0 PUT$ .
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