by Saqib Iqbal Ahmed

NEW YORK (Reuters) – Traders are forecasting a more than $300 billion (269.57 billion euros) swing in Nvidia shares after the artificial intelligence (AI) giant reports second-quarter results on Wednesday after the close of trading.

U.S. options on Nvidia show the stock is expected to move about 9.8% higher or lower on Thursday, according to data from analytics firm ORATS.

This expected variation on the action is the highest ever anticipated before the group’s quarterly financial publications over the last three years. The average variation expected during this period comes to 8.1%, according to ORATS.

Given Nvidia’s market capitalization of about $3.11 trillion, a 9.8% move in the stock would translate to about $305 billion in trade, likely the largest post-earnings move for a company in history, analysts said.

A $305 billion move in Nvidia’s stock represents a sum above the market capitalization of 95% of the companies in the S&P 500 index, including Netflix and Merck, according to LSEG data.

The results from Nvidia, whose chips are widely considered the gold standard in AI, also have important implications for financial markets as a whole.

Nvidia shares are up about 150% year-to-date, representing about a quarter of the gains in the S&P 500 index, which has risen 18% since January.

“It (Nvidia) has been a major contributor to the overall performance of the S&P 500 on its own,” said Steve Sosnick, chief strategist at Interactive Brokers. “It’s the titan that’s propping up the market.”

Options suggest traders are more concerned about missing out on a big move higher in Nvidia than being hurt by a big move lower.

The probability of the stock rising more than 20% by Friday is estimated by traders at 7%, while the probability of the stock falling more than 20% is only 4%, according to an analysis of options data by Susquehanna Financial.

“(Before earnings) people typically want to buy coverage, they want to buy insurance, but in the case of Nvidia, a lot of that insurance is FOMO insurance,” Sosnick said, referring to the acronym “fear of missing out.”

“They don’t want to miss a rally,” he added.

Part of the reason options traders are pricing in such a big move for Nvidia is the stock’s high past volatility.

Nvidia’s 30-day average historical volatility since the start of the year is about twice that of companies with market capitalizations above $1 trillion, according to a Reuters analysis of Trade Alert data.

“Options are just reflecting the actual movement of the stock,” notes Christopher Jacobson, strategist at Susquehanna Financial Group.

“NVDA (Nvidia) has become a very popular title for institutions and individuals,” he added.

(Reporting Saqib Iqbal Ahmed; Claude Chendjou, editing by Kate Entringer)

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