NVIDIA Corp (NVDA) has introduced new options trading for the March 27th expiration, notably a put contract at a $155 strike price with a current bid of $5.10. This contract allows investors to buy NVDA shares at $155, resulting in an effective cost basis of $149.90—approximately 13% lower than the current share price of $172.75. The probability of this put contract expiring worthless stands at 74%, potentially yielding a 3.29% return on the cash commitment, which annualizes to 24.04%.
On the call side, a call contract priced at $180 has a bid of $8.60, representing a 4% premium over the current share price. If NVDA shares are sold at this strike, investors could see a total return of 9.18%, with a 54% chance of the contract expiring worthless, allowing them to retain both shares and premium collected. The annualized return in this case would be 36.37%.
Implied volatilities for the put and call contracts are 59% and 47%, respectively, while the trailing 12-month volatility of NVDA stands at 44%.
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