This morning I established a short-term Covered Calls position in Nvidia Corporation (ticker NVDA). My net buy/write limit order at $150.40 was executed by simultaneously purchasing four hundred shares at $156.37 and selling four July 11th, 2025 weekly Call options at the $152.50 strike price at $59.7 per share, which provides a $2.10 per share = [$5.97 Call options premium received - ($156.37 stock purchase price - $152.50 options strike price)] time value profit potential. A moderately in-the-money Covered Calls positions was established with the probability that the stock will close in-the-money on the options expiration date was 66.3%. As preferred, the next earnings report on August 27th, 2025 is after the July 11th options expiration date.
As detailed below, a potential return-on-investment result is +1.4% absolute return-on-investment (equivalent to +50.8% annualized
return-on-investment for the next 10 days) if the Nvidia share price is in-the-money (i.e. above the $152.50 strike price) and therefore assigned on its July 11th, 2025 options expiration date.
Nvidia Corporation (NVDA) -- New Covered Calls Position
Today's buy/write net limit order transaction was as follows:
7/1/2025 Bought 400 Nvidia Corporation shares at $156.37.
7/1/2025 Sold 4 NVDA 7/11/2025 $152.50 Call options @ $5.97 per share. The Implied Volatility of these Calls was 34.9% when this position was established.
A possible overall performance result (including commissions) for this Nvidia Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $60,162.68
= ($156.37 - $5.97) * 400 shares + $2.68 commission
Net Profit:
(a) Options Income: +$2,385.32
= ($5.97 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 400 Nvidia shares assigned at the $152.50 strike price at expiration): -$1,548.00
+($152.50 strike price - $156.37 stock purchase price) * 400 shares
Total Net Profit Potential (If 400 Nvidia shares in-the-money and therefore assigned at the $152.50 strike price at the options expiration date): +$837.32
= (+$2,385.32 options income + $0.00 dividend income - $1,548.00 capital appreciation)
Potential Absolute Return-on-Investment: +1.4%
= +$837.32/$60,162.68
Potential Annualized Return-on-Investment: +50.8%
= (+$837.32/$60,162.68) * (365/10 days)