$NVIDIA (NVDA.US)$ covered call premiums are incredible. L...
Let’s say you buy 100 shares today at $125.
Cost = $12,500.
You can then sell a covered call for December at $140 strike and collect $1,375 in premium.
That’s an 11% return in 5 months on top of the 12% gain $NVDA would need in order to get to $140, which would mean Nvidia needs to add $370B in market cap by December.
Given these premiums, the market is betting that Nvidia will likely add more than that after Q2 and Q3 earnings.
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贫困大学生 : There is something called volatility
higher volatility implies higher premium for options underwriters to accept higher risks associated with the stock