Goldman lists 20 stocks where options volumes matter most, including NVDA and SMCI
The artificial intelligence (AI) boom that took the world by storm in early 2023 extended into this year, with the likes of NVIDIA Corporation (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Super Micro Computer (NASDAQ:SMCI), among many others, continuing to reap benefits from this technological revolution.
This sustained momentum has pushed the broader S&P 500 to several consecutive record highs in recent months. The benchmark index is already up 8.5% in 2024.
Options volume refers to the total number of options contracts traded in a day for a particular security, demonstrating the overall activity level of options for stocks or indexes.
It's a key metric for investors as it indicates the liquidity of an option; a higher volume means more liquidity, facilitating easier entry and exit positions at competitive prices.
Another important gauge that investors monitor is open interest, which represents the total number of outstanding options contracts that have not been settled. Unlike options volume, which resets daily, open interest provides a cumulative tally, increasing with newly opened positions and decreasing as contracts are closed.
For stock investors, understanding options volume and open interest is highly important.
High volume can signal that a particular option is attracting significant attention, possibly due to impending news or market movements. Meanwhile, open interest offers insights into the strength and potential direction of the market or specific stock trends.
Together, these metrics help investors gauge market sentiment, with rising volume and open interest often indicating bullishness, while declining figures might suggest bearish trends. Thus, by monitoring both, investors can make more informed
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