Investors in NVIDIA Corp (NASDAQ: NVDA) saw new options trading begin today for contracts expiring on June 24. Notably, a put contract at the $205.00 strike price has a current bid of $5.00, allowing investors to purchase shares at an effective cost of $200.00, representing a 1% discount from the current share price of $206.86. The likelihood of this put contract expiring worthless is estimated at 55%, promising a potential return of 2.44% on the cash commitment, or 59.35% annualized.
On the call side, a contract at the $210.00 strike price is bid at $4.50. Investors selling this as a covered call could achieve a total return of 3.69% if the stock is called away at expiration. There is a 57% chance this call contract could also expire worthless, allowing investors to retain their shares and the premium, resulting in a 2.18% boost to return, or 52.93% annualized.
The implied volatility for both the put and call contracts is approximately 39%, while the past year’s actual volatility stands at 35%.
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