Nvidia's 10 for 1 Stock Split Should Create More Demand for the Stock, But it Could Create More Volatility Down the Road
- Nvidia’s very positive earnings and guidance should be quite bullish for the broad stock market…as long as it doesn’t see the kind of quick reversal it experienced after they reported great numbers last August.
- The 10 for 1 stock split for NVDA could/should attract more individual investors for the stock, but it should also do the same for its options. That could be bullish near-term, BUT it could also create more volatility when the stock sees any (inevitable) corrections in the future. (The impact of “gamma” works in both directions.)
- When NVDA’s initial bounce faded quickly last August, it came during a time of rising long-term bond yields. So, as long as the recent drop in those yields continues, it shouldn’t be a problem. However, we do need to note that the trend of higher long-term yields since the beginning of the year is still intact…so any rebound in yields could create some headwinds.
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