Super Micro Computer, Inc. (SMCI), Trending Stock Report

Super Micro Computer, Inc. (SMCI) is trending in the news with headlines that talk about GPU shipments and big AI demand. Social media mentions are up 5,100% in the last 24 hours as investors see SMCI as a value play on strong AI demand. For instance, the company’s Forward P/E is a respectable 14.53 according to data provided by Refinitiv.

From an option trader’s perspective, the huge demand for options has pushed SMCI’s short-term option prices through the roof (See the next page). This creates an opportunity for a limited-risk, high-probability trade.

If you attend today’s ODDS Online Coaching session, we will show you how we can pair a high-probability trade on SMCI with a high-profit trade on NVDA to potentially hit a home run in the AI sector.

This Volatility Term Structure chart for SMCI shows that volatility expectations for October 11^th expiration are extremely high as demand drives options prices to ridiculous levels. This is great for option selling strategies.

This MDM graph compares the modeled expected distribution for future stock prices (the orange line) with the actual distribution of SMCI’s share prices over the past 4 years (the blue histogram). You can see that the actual stock movement does not look like the modeled expectations. This graph tells us that expectations are extreme. Investors expect much larger moves than SMCI shares have actually made in the past 4 years. Options prices are ridiculously expensive compared to stocks past behavior.

This Volatility Cone chart for SMCI compares implied volatility expectations for each term to the historical volatility for that same term. The blue line shows the average historical volatility, the purple lines show each HV measure’s highest high and the lowest low over the past 4 years.

This graph does not show terms shorter than 1 month. That said, every term is above the 4-year average and when you look at the term structure on page 3, short term expectations are even higher. This graph confirms that options on SMCI are expensive, and that is good for option sellers.

SMCI options expiring on October 11^th are expensive. Investors are overestimating the chances of SMCI shares making a down move greater than 14% by Friday’s expiration. This opens up an opportunity for limited-risk, high-probability Put Credit Spread.

To get the specific details and prices on today’s trade ideas, be sure to read today’s ODDS Online Daily Option Trade Idea.

Don’t forget to attend today’s ODDS Online Coaching session to see how we can pair this high-probability trade with an NVDA high-profit trade to swing for a home run in the AI sector today.