NVDA Analysis


Update 2/10/2017: NVDA declined immediately after earning were publishing, and the options position hit my target price. I exited at 25% of maximum potential income.

Shares declined by 3.3% over one day, or a -1,191% annual rate. The options position produced a 33.3% yield on debit for a +12,154% annual rate


NVDA publishes earnings on Thursday after the closing bell.

I shall use the MAR series of options, which trades for the last time 36 days hence, on March 17.

Implied volatility stands at 53%, which is 4.9 times the VIX, a measure of the volatility of the S&P 500 index.

NVDA’s IV stands in the 63rd percentile of its annual range and the 80th percentile of its most recent broad movement.

The price used for analysis was $117.91.

Premium: $12.49 MAR iron fly
NVDA   Odds Delta
Long 140.00 88.0% 15
Break-even 127.49
Short 115.00 47.1% 59
Short 115.00 52.8% 41
Break-even 102.51
Long 95.00 89.0% 8

The premium is 56% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered a position on NVDA as described above. The stock at the time of entry was priced at $117.71.

By Tim Bovee, Portland, Oregon, Feb. 9, 2017

2 thoughts on “NVDA Analysis

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