$NVIDIA(NVDA.US) Today in 2026, the handling of earnings reports for tech giants (like NVIDIA, Apple, Microsoft) by US stock market makers (MMs) has entered an extreme quantitative stage. They are not betting on whether the earnings will be good or bad, but rather using the movement of implied volatility (IV) and the hedging demands of retail/institutional investors to earn nearly risk-free profits.

Here are the three most core "arbitrage" strategies they currently employ:

1. Volatility Crush Arbitrage

This is the most classic arbitrage model during earnings season.

• Pre-earnings: As earnings approach, uncertainty increases, and the implied volatility (IV) of options soars, making option prices (premiums) extremely expensive. Market makers, as the counterparty, sell a large number of options to speculators.

• Post-earnings: Regardless of whether the stock price surges or plummets, once the uncertainty is resolved, IV collapses rapidly (IV Crush).

• Arbitrage Logic: Market makers use complex hedging (Delta Neutral) to ensure they are not exposed to directional risk. They profit from the disappearance of the "fear premium" in the option premiums before and after earnings. Even if the stock price fluctuates significantly, as long as the volatility does not exceed the "breakeven point" in the option pricing, the market maker wins effortlessly.

2. Gamma Hedging & Pinning

Tech giant earnings reports are typically preceded by massive options trading, forcing market makers into "dynamic hedging" mode.

• Gamma Trap: If retail investors heavily buy call options, market makers, as sellers, hold "negative Gamma." When the stock price rises, market makers must continuously buy shares to hedge Delta; when the price falls, they must sell.

• The Boundary Between Arbitrage and Manipulation: On the eve of an earnings announcement, you'll often find tech stocks repeatedly hovering around a certain integer price point (e.g., $200 or $500). This is often market makers using their hedge positions to **"pin" the stock price**, causing a large number of options to expire worthless, allowing them to pocket the entire premium.

3. Dispersion Trading (Index vs. Single Stock Volatility Arbitrage)

This is currently the most secretive play by high-frequency traders and top-tier market makers.

• Logic: Market makers find that the sum of the individual stock volatilities of tech giants (Mag 7) often does not match the overall volatility of the Nasdaq 100 index (QQQ).

• Operation: They sell expensive options on single tech stocks (e.g., NVDA, TSLA) while simultaneously buying cheap options on the overall Nasdaq index.

• Arbitrage Point: Earnings season is when individual stock performance is most "dispersed." Through this method, they hedge against the risk of a general market crash, purely arbitraging the premium brought by overheated expectations for a single stock's earnings.