NVDA Analysis


Update 6/15/2017: NVDA traded sideways during the period I held the position, and I exited at my target price of 25% of maximum potential profit.

Shares declined by -1.0% over six days, or a -60% annual rate. The options position produced a 33.3% yield on debit for a +2,025% annual rate.

NVDA has sufficiently high implied volatility on all the metrics I use — against the annual range, current trend and VIX — that it is worth examining for a trade.

I shall use options that trade for the last time 14 days hence, on June 23.

Implied volatility stands at 42%, which is 4.1  times the VIX, a measure of the volatility of the S&P 500 index.

NVDA’s IV stands in the 52nd percentile of its annual range and the 75th percentile of its most recent broad movement.

The price used for analysis was $149.96.

Premium: $11.25 Expire OTM  
NVDA-iron fly Strike Odds Delta
Long 175.00 92.2% 10
Break-even 161.25
Short 150.00 52.5% 51
Short 150.00 47.2% 49
Break-even 136.25
Long 125.00 89.5% 8

The premium is 45% of the width of the position’s wings.

The risk/reward ratio is 1.2:1.

Decision for My Account

I have entered an order on NVDA as described above. The stock at the time of entry was priced at $149.32.

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


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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