NVIDIA Corp. (NVDA)
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.
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