NVDA Analysis


NVDA publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days hence, on Aug. 18.

Implied volatility stands at 60%, which is 4.2 times the VIX, a measure of the volatility of the S&P 500 index.

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

The price used for analysis was $168.24.

Premium: $16.46 Expire OTM  
NVDA-iron fly Strike Odds Delta
Long 200.00 91.2% 11
Break-even 186.46 ~81.0% ~23
Short 170.00 54.4% 49
Short 170.00 43.7% 51
Break-even 156.46 ~66.1% ~29
Long 140.00 89.3% 8

The premium is 55% of the width of the position’s wings.

The risk/reward ratio is 0.8:1.

Decision for My Account

This trade is a beautiful set, a work of art, really. But I’m passing on it. The price of the stock and the high implied volatility mean that even at one contract I would have to commit more to a single position than I’m comfortable doing. My motto: Trade small, trade often.

By Tim Bovee, Portland, Oregon, Aug. 10, 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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