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Luke Kawa2/26/25

Nvidia’s recent earnings reports have been ruinous for options buyers

Scott Murray, an options trader who runs the Smashing Volatility Substack, just put out a great note on Nvidia’s earnings, due out after the close on Wednesday.

(For a look at what Wall Street’s expecting from the chip designer’s Q4 earnings, see here.)

One highlight: over the past 12 quarters, Nvidia’s earnings reaction has tended to be smaller than the option-implied move. Particularly the last two reports.

“Unlike Tesla which has a habit of blowing away the straddle price, Nvidia does the opposite,” Murray wrote.

Nvidia earnings reaction — Source: Smashing Volatility substack

What’s more, he observed, Nvidia tends to open higher the following session and then pare a chunk of those gains.

“That makes perfect sense; there are endless derivatives swirling around this thing. Which means a gargantuan amount of premium,” he added. “You know that on a spike, folks will get some call yield slash overlay their longs and yolos will sell their long calls.”

After the chip designer reported in August, it ended the week nearly at the precise point of “max pain” for buyers of options — the price at which the highest notional value of options would expire as worthless.

(For this Friday’s expiry, the $140 strike is where the most call open interest is, so that may prove a tough wall to break through and hold in the event of a positive surprise this time around.)

The options market, which had looked a little complacent about how big Nvidia’s post-earnings move would be a few days ago, has since ratcheted up its implied expectations for the reaction on this event.

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Space, drone, and satellite stocks continue their Iran war-driven rally

Space, drone, and satellite stocks like Rocket Lab, Redwire, Intuitive Machines, AST SpaceMobile, and Planet Labs are outperforming both broader indexes and the thematic baskets of momentum stocks and shares with high retail sentiment with which they are often lumped.

There’s little clear news on the tape to attribute for the move higher. (Though the FAA did announce a streamlining of launch licensing rules that cover a number of these companies, including Rocket Lab and Firefly Aerospace, as well as Tesla CEO Elon Musk’s commercial space giant, SpaceX.)

More broadly, the outbreak of war with Iran has burnished the space, drone, and satellite sector in the eyes of investors, as the conflict underscores the importance of the three technologies to the future of defense. And in a world where nations are growing unsure of traditional alliances, countries across the board will look to boost their own capabilities. (Belgium just announced that it has selected Redwire, for example, to provide its first national security satellite system. Belgium!)

As Goldman Sachs analysts put it in a research note from January:

“Companies with native drone and satellite technology cultures like AeroVironment and Rocket Lab may find themselves particularly well positioned. And in Europe, a remilitarization of the Continent is underway that could require a $160bn investment over the next 5 years just to catch up with Russia.”

Since the start of the Iran war, most of these types of shares have handily outpaced the Nasdaq Composite Index. Rocket Lab, Redwire, and Intuitive Machines are all up more than 12% during that period, compared to a Nasdaq that’s just slightly in the red, as of shortly before 12 p.m. ET on Tuesday.

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Oklo surges after receiving approval for next phase in the construction of its first reactor

Revenue-free retail favorite Oklo is up in early trading after announcing regulatory updates on its first product, a reactor it calls Aurora, which it has started building at the US Energy Department’s primary nuclear energy research and development center, the Idaho National Laboratory.

Oklo announced that it signed an “other transaction agreement” (OTA) with the Department of Energy early Tuesday. (OTAs are typically used by the federal government to enter into research, prototyping, and production deals with private entities outside of the typical procurement processes.)

Oklo also announced that the DOE’s Idaho Operations Office also signed off on a preliminary safety design review for the reactor, which is expected to be completed sometime in late 2027 or 2028. The company broke ground on the project in September.

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Given the close involvement of the federal government in the development of nuclear power plants, Oklo’s close ties to the Trump administration have been seen as an important advantage for the company — but have also drawn scrutiny and criticism.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Oklo Announces U.S. Department of Energy Approval for Nuclear Safety Design Agreement of Aurora Powerhouse at Idaho National Laboratory

Oklo announced that it signed an “other transaction agreement” (OTA) with the Department of Energy early Tuesday. (OTAs are typically used by the federal government to enter into research, prototyping, and production deals with private entities outside of the typical procurement processes.)

Oklo also announced that the DOE’s Idaho Operations Office also signed off on a preliminary safety design review for the reactor, which is expected to be completed sometime in late 2027 or 2028. The company broke ground on the project in September.

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Given the close involvement of the federal government in the development of nuclear power plants, Oklo’s close ties to the Trump administration have been seen as an important advantage for the company — but have also drawn scrutiny and criticism.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

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