Nvidia Flies In Blue Skies, Options Traders Hammer Calls

NVIDIA Corporation NVDA was ripping over 5% higher into blue skies Thursday.

Jefferies maintained a Buy rating on the graphics processor and technology company and upped its price target from $740 to $854.

On the technical side of the stock, Nvidia broke up from a daily bull flag it had created from June 11-16.

Its meteoric rise from the $540 level on May 19 has been propelled by three consecutive bull flags on the daily chart created after a long period of consolidation that began on April 15. It should be noted, however, that Nvidia’s stock has left two gaps below — one at the at the $560 area and another around $589.

Since gaps fill 90% of the time, Nvidia’s stock may revisit those areas in the future.

The gaps didn’t deter options traders from piling into Nvidia, and together they purchased well over $8.1 million worth of call contracts indicating they believe Nvidia has room to fly higher.

See Also: How to Buy NVIDIA Stock

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The Nvidia Option Trades: Below is a look at the most notable options alerts, courtesy of Benzinga Pro:

At 9:31 a.m. Thursday, a trader executed a call sweep near the ask of 200 Nvidia options with a strike price of $700 expiring on June 18. The trade represented a $326,200 bullish bet for which the trader paid $16.31 per option contract.

At 10:41 a.m., a trader executed a call sweep near the ask of 250 Nvidia options with a strike price of $620 expiring on July 16. The trade represented a $3.15-million bullish bet for which the trader paid $126 per option contract.

At 11 a.m., a trader executed a call sweep near the ask of 326 Nvidia options with a strike price of $800 expiring on July 16. The trade represented a $345,886 bullish bet for which the trader paid $10.61 per option contract.

At 11:20 a.m., a trader executed a call sweep near the ask of 200 Nvidia options with a strike price of $745 expiring on June 18. The trade represented a $178,000 bullish bet for which the trader paid $8.90 per option contract.

At 11:36 a.m., a trader executed a call sweep near the ask of 297 Nvidia options with a strike price of $700 expiring on June 18. The trade represented a $1.48-million bullish bet for which the trader paid $50 per option contract.

At 11:36 a.m., a trader executed a call sweep at the ask of 300 Nvidia options with a strike price of $700 expiring on June 18. The trade represented a $1.5-million bullish bet for which the trader paid $50 per option contract.

At 12:17 p.m., a trader executed a call sweep near the ask of 473 Nvidia options with a strike price of $790 expiring on July 16. The trade represented a $605,440 bullish bet for which the trader paid $12.80 per option contract.

At 2:40 p.m., a trader executed a call sweep near the ask of 234 Nvidia options with a strike price of $735 expiring on July 16. The trade represented a $845,910 bullish bet for which the trader paid $36.15 per option contract.

NVDA Price Action: Shares of Nvidia gained 4.76% Thursday, closing at $746.29.