NVDA Analysis


Update 5/15/2017: NVDA gapped sharply to the upside immediately after earnings were published and continued the rise for four trading days. I exited for a loss for a $15.14 debit.

Shares rose by 27.1% over six days, or a +1,650% annual rate. The options position produced a -1,149% annual rate.

NVDA publishes earnings on Tuesday after the closing bell.

I shall use the series of weekly options that trade for the last time 10 days hence, on May 19.

Implied volatility stands at 49%, which is 4.9 times the VIX, a measure of the volatility of the S&P 500 index.

NVDA’s IV stands in the 66th percentile of its annual range and the 98th percentile of its most recent broad movement.

The price used for analysis was $104.19.

Premium: $8.68 Expire OTM  
NVDA-iron fly Strike Odds Delta
Long 120.00 92.2% 9
Break-even 113.68
Short 105.00 55.0% 50
Short 105.00 45.0% 50
Break-even 97.68
Long 89.00 87.8% 10

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

The risk/reward ratio is 0.8:1.

Decision for My Account

I have entered a position on NVDA as described above. The stock at the time of entry was priced at $104.15.

By Tim Bovee, Portland, Oregon, May 9, 2017

2 thoughts on “NVDA Analysis

Comments are closed.