1117 | Much-Anticipated "Crazy Thursday": NVIDIA Earnings, Fed Minutes, and Non-Farm Payroll Data Released on the Same Day!

Good Monday, fellow investors! Welcome to this issue of Options Weekly!

Over the past week, the U.S. stock market exhibited a 'hot-to-cold' trend. In the first three days, market sentiment improved significantly due to renewed government stimulus. However, expectations for a December rate cut retreated sharply, and lingering skepticism about the prospects of AI continued to weigh on the market, causing noticeable volatility. Numerous popular stocks broke key support levels, while Bitcoin plunged sharply to around $93,000, erasing all its year-to-date gains.

This week’s key events are concentrated on Thursday. First, the minutes of the Fed meeting will be released in the early hours of Thursday Beijing time. Following that, NVIDIA's earnings will be announced after the market close. Finally, the much-delayed non-farm payroll data will be released later that night. Facing this 'Crazy Thursday,' can the market shake off its gloom, and what options strategies can be deployed?

1. Fed Minutes + Non-Farm Payroll Data: Is the Interest Rate Path Becoming Clearer?

During the US government shutdown, the Fed’s decision-making fell into a 'data vacuum.' Last week, several Fed officials took a hawkish stance, explicitly opposing further rate cuts in December, putting pressure on the market. According to CME interest rate futures, rate cut expectations have significantly retreated compared to last month. The market consensus has shifted from a high probability of a 25-basis-point cut to a likelihood of no action at all.

At 2 a.m. Beijing time on Thursday, the Fed will release the minutes of the October Federal Open Market Committee (FOMC) meeting. Unlike the fixed-format official statement released immediately after the meeting, the minutes provide detailed insights into economic discussions, reveal internal disagreements and consensus, and help predict potential future policy adjustments.

With the government reopening, the accumulated 'data backlog' will gradually be released. At 8:30 a.m. Eastern Time on Thursday (9:30 p.m. Beijing time), the market will receive the September non-farm payroll data, absent for nearly two months. According to the schedule disclosed by the US government, inflation data including the PCE price index will be released next Wednesday (November 26).

Institutional Perspectives

Goldman Sachs noted that its tracked employment growth indicators have significantly slowed down. The number of early warning notices that companies must file before large-scale layoffs has risen to the highest level since 2016 (excluding the initial period of the COVID-19 pandemic). This data typically leads official initial jobless claims by about two months, suggesting that official unemployment figures may also rise soon. Additionally, the proportion of mentions of "layoffs" among Russell 3000 index component companies is increasing, especially during the ongoing third-quarter earnings season of 2025.

Morgan Stanley expects the Federal Reserve to cut interest rates again in December, but this view will face challenges if labor market data turns out stronger than expected.

Opportunity Analysis

The Federal Reserve's meeting minutes and the U.S. employment report will jointly shape market expectations regarding the Fed’s December monetary policy decision, thereby influencing capital market performance.

The market will look to the Fed minutes for insights into the extent of divergence and decision-making logic regarding whether to continue rate cuts in December. Recent statements by Fed officials indicate that hawks are primarily emphasizing inflation risks, while doves are focusing on pressures in the labor market. The non-farm payroll data released later that day will be a key indicator for assessing the health of the labor market. If the data aligns with or is weaker than expectations, it could reinforce expectations of an economic slowdown and increase the likelihood of rate cuts; if unexpectedly strong, it would further weaken rate-cut expectations and weigh on the market.

However, it is important to note that the non-farm payroll data released on Thursday reflects September conditions, which should have been published in early October, making it somewhat dated. The exact release date for the latest October data remains uncertain. White House National Economic Council (NEC) Director Hassett stated that due to the government shutdown, some surveys relying on manual collection were not conducted, meaning some October data may be "permanently lost."

Options Analysis

This Thursday features multiple significant events, and investors can deploy targeted options strategies based on the daily expiration characteristics of broad-market ETFs. Individual stock options typically expire monthly, with weekly options available for some popular stocks. However, highly liquid index ETF options like SPY and QQQ offer expiring contracts every trading day. Here, we provide strategy references using SPY as an example:

(1) Opportunistically bottom-fish

The S&P 500 Index found strong support at the MA60 level during last week's market volatility. One may consider selling the SPY 670 put option expiring on Thursday in advance, creating a cash-secured put option strategy. If SPY falls below this level at that time, one can purchase the corresponding amount of SPY at the target price. If it remains above, the premium can be secured as profit.

(2) Participating in Market Volatility

For investors with higher risk appetites, direct participation in 0DTE options (Zero Days to Expiration options) trading on Thursday is possible, making timely adjustments based on market reactions to significant events. The premiums for 0DTE options are relatively low, with minimal time value but offering high potential leverage, enabling substantial returns within a short period. However, it should be noted that this strategy also carries higher risks.

2. NVIDIA's Earnings: Can They Overcome 'Peak Growth' Concerns?

NVIDIA will release its FY26 Q3 earnings report after the market closes on November 19 Eastern Time (corresponding to October 27, 2025, in the natural year). The consensus revenue estimate for FY2026 Q3 stands at $54.89 billion, representing a year-over-year increase of 56.46%, up from the previous guidance of $54 billion. The earnings per share estimate is $1.196, marking a 53.29% year-over-year growth.

Amidst prevailing concerns about an 'AI bubble,' NVIDIA’s earnings report may determine whether the AI narrative in the market continues and could even influence the broader U.S. equity market trend.

Institutional Perspectives

The main focus of NVIDIA's upcoming earnings report centers on three key dimensions, the articulation of which will directly impact the market’s assessment of the company’s short-term performance and long-term strategic outlook:

(1) Progress and Long-Term Outlook on Data Center Revenue Guidance

At the recent GTC conference, the company projected that the Blackwell and next-generation Rubin chips would generate approximately $500 billion in revenue between 2025 and 2026. This guidance significantly exceeds the market’s prior consensus and has raised growth expectations substantially.

A recent report by Morgan Stanley indicated that current growth bottlenecks are more concentrated on NVIDIA's supply side, as well as in complementary hardware (storage, servers), and space/power constraints. However, these should not slow the evident acceleration in demand. Industry surveys show a substantial uptick in demand, and given the robust order backlog, the company could issue higher guidance, contingent upon how conservative it chooses to remain in an environment of strong demand.

(2) The production ramp-up of Blackwell Ultra and the mass production progress of the Rubin chip

Last quarter’s earnings report revealed that the transition of the GB300 production line has proceeded smoothly, with weekly capacity increasing to approximately 1,000 cabinets. Further acceleration is expected in Q3. However, given Blackwell’s previous capacity fluctuations, the market remains highly sensitive about whether the next-generation Rubin platform can achieve timely and stable mass production. Any updates on this progress will influence investors’ assessment of technical execution capabilities.

(3) Can gross margin return to above 75%?

The company’s Non-GAAP gross margin declined from 78.9% in Q1 2024 to 71.3% in Q1 2025, slightly recovering to 72.7% in Q2 2025, with guidance for the current quarter at 73.5%. The market is closely watching whether Q4 can reclaim the critical threshold of 75%. Against AMD’s forward-looking gross margin guidance of 55%–58% (currently at 54.5%), maintaining an approximate 20-percentage-point gross margin advantage will be a key indicator of NVIDIA’s pricing power and premium market positioning.

Opportunity Analysis

NVIDIA is currently at a pivotal stage where valuation and growth prospects are being reassessed, with both short-term volatility and long-term logic coexisting.

In terms of long-term logic, the generative AI wave continues to expand, and NVIDIA, as a core supplier of computational power, stands to benefit directly. The company is also actively exploring new areas such as quantum computing, 6G, and robotics, opening up long-term growth opportunities. If this earnings report delivers comprehensive results surpassing expectations, it could challenge market perceptions of its growth plateau and reverse the recent underperformance relative to other AI peers.

However, risks must also be acknowledged. Market expectations are already high, and during this sensitive period, any minor shortcomings could be interpreted as a signal of “peak growth.” Should actual performance fall short of or merely meet expectations, it might trigger a sharp selloff driven by a “gap in expectations.”

Options Analysis

The implied volatility in the options market for this earnings day is ±7.08%. Historically, over the past 15 quarters, the actual post-earnings volatility has exceeded the pre-announcement implied volatility in only four instances. This relatively low success rate indicates that NVIDIA's actual volatility rarely exceeds the implied range by a significant margin.

The put/call ratio stands at 0.59, reflecting bullish sentiment but with recent fluctuations indicating complex and mixed investor emotions. The implied volatility (IV) as of November 14 was 54.34%, higher than the historical volatility of 41.95% and positioned at the 68th percentile of IV, suggesting that the options market is pricing in elevated short-term earnings volatility.

(1) Short Volatility

Based on the pattern observed over the past eight quarters, the decline in NVIDIA's implied volatility (IV) after earnings reports typically ranges between 5 to 20 volatility points, averaging approximately 10 points. Given the elevated level of implied volatility prior to this earnings release, a reversion in volatility post-earnings is also likely. Additionally, the "double whammy" price action (where both long and short positions incur losses) following earnings announcements is not uncommon in NVIDIA's history.

In light of the above, investors looking to bet on volatility reversion may consider employing a Short Strangle strategy. To hedge against potential significant upside or downside surprises, strike prices should be set sufficiently far from the current price, approximately twice the expected earnings-day volatility.

(2) Opportunistic Buying

Investors who are bullish on NVIDIA and aim to acquire shares at lower prices can use strong support levels as a reference for strike prices and sell put options amid the currently elevated volatility.

3. Tesla Breakout: What’s Next?

A combination of the U.S. government shutdown and the debate surrounding an “AI capital expenditure bubble” has led to tighter liquidity. Additionally, a sharp decline in expectations for Federal Reserve interest rate cuts and concerns over high valuations in the technology sector have collectively driven a broad-based correction in high-valuation tech stocks. Data shows that institutional clients have net sold over $67 billion worth of Tesla shares year-to-date, with trading volume reaching 118,900 contracts on November 13, hitting a multi-month high, accompanied by a 6.64% drop that broke below the key support level of $412–$428.

Institutional Perspectives

The market widely believes that Tesla is accelerating its transformation from an electric vehicle company to a diversified technology enterprise centered on artificial intelligence and robotics, targeting long-term growth opportunities larger than its automotive business. An analysis of innovative initiatives shows that Tesla has multiple potential catalysts in the medium term, which, once materialized, will serve as key drivers for a breakthrough in its stock price.

(1) Humanoid robots

The Optimus robot project has initiated pilot production, with a goal of achieving a trial manufacturing capacity of several thousand units by the end of the year, laying the groundwork for reaching an annual production of one million units by 2030.

(2) Autonomous driving

The next version of the FSD software is currently planned to begin internal testing of V14 alpha in Q4 2025, with the official release of V14 scheduled for Q1 2026. For the Chinese market, Elon Musk predicts that FSD will receive full approval in February or March 2026. He also stated that the Cybercab, which will be fully devoid of steering wheels and pedals, will enter production in April 2026.

Tesla plans to hold a Roadster product demonstration on April 1, 2026. Approximately 12 to 18 months after that, the Roadster will officially enter the mass production phase.

Opportunity Analysis

Following the delivery and earnings report in Q3, as well as the board's resolution, Tesla’s short-term stock price will shift back to being driven by technical factors. After breaking below a key support level last week, if the stock fails to rebound and stabilize above $420 in the coming week, the short-term trend will likely remain weak. Tesla has limited support in the $370–$400 range due to sparse trading volumes; if the weakness persists, the stock price may test levels near $320, representing approximately a 20% downside correction.

Options Analysis

(1) No position or considering adding to positions

It is advisable to patiently wait for a clearer entry point. As per the aforementioned logic, if the stock price fails to return to the previous consolidation range, there remains downside potential. A more optimal position could be near the next strong support level, which can be approached through Long Call or Bull Call Spread strategies to capitalize on catalysts from innovative business initiatives post-2026.

(2) For those already holding positions with a long-term positive outlook

Continue to hold the position and consider implementing a Protective Put strategy, which involves purchasing a corresponding number of put options while holding the underlying stock to hedge against potential downside risks during periods of market weakness.

Brian Wong

Futu Investment Strategy Expert

CE: BBH085

Disclaimer

This content does not constitute any offer, solicitation, recommendation, opinion, or any guarantee regarding securities, financial products, or instruments. The risk of loss in trading options can be substantial. In certain circumstances, the losses you incur may exceed your initial margin deposit. Even if backup instructions such as 'stop-loss' or 'limit' orders are set, they may not necessarily prevent losses. Market conditions may render such instructions unexecutable. You may be required to deposit additional margin within a short period of time. If you fail to provide the required amount within the specified timeframe, your open positions may be liquidated. Nevertheless, you remain responsible for any shortfall in your account resulting from such liquidation. Therefore, before engaging in trading, you should thoroughly study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should familiarize yourself with the procedures for exercising options and the rights and obligations that arise upon exercise or expiration of the options.