NVIDIA Corp (Symbol: NVDA) has introduced new options for October 16th expiration, offering investors the opportunity to trade with a significant time value of 217 days remaining. A notable put contract at a $155.00 strike price has a current bid of $10.15, which could allow an investor to commit to purchasing shares at this price, effectively lowering their cost basis to $144.85 per share, compared to the current trading price of $183.98, representing a 16% discount. There’s a 76% chance that this put contract could expire worthless, potentially yielding a 6.55% return on cash commitment (or 11.01% annualized) if it does.
On the call side, a contract at the $195.00 strike price has a bid of $18.90. By purchasing shares at $183.98 and selling this covered call, investors could see a total return of 16.26% if the stock gets called away by the expiration date. The $195.00 strike is about 6% above the current price, with a 47% chance of expiring worthless, thus allowing the investor to retain both their shares and premium, potentially enhancing returns by 10.27% (or 17.28% annualized). The implied volatilities for the put and call contracts are noted at 49% and 45%, respectively.
