Established Covered Calls in NVIDIA Corporation

Early in this morning's trading session, I established a Covered Calls position of 14 days duration in NVIDIA Corporation (ticker NVDA).  My net buy/write limit order at $173.20 was executed by simultaneously purchasing two hundred shares at $177.70 and selling two December 5th, 2025 weekly Call options at $4.50 per share and at the $185.00 strike price. A moderately out-of-the-money (strike price above the stock purchase price) Covered Calls position was established with the probability that NVIDIA's stock will close in-the-money (i.e. above the $185.00 strike price) on the 12/5/2025 options expiration date was 34.2% when this transaction was executed. 

NVIDIA reported their Q3 earnings after the market close Wednesday. They substantially beat analysts' estimates on all relevant metrics including both earnings and revenue (which at $57 billion was 62.5% above the comparable quarter last year). In addition, their Q4 guidance at $65 billion is 65.4% above last year and their sequential gross margin guide increases from 73.6% in the current quarter to 75.0% for Q4. Surprisingly, their stock reacted very negatively yesterday.  I decided that the negativity was unwarranted -- so this morning I established this new Covered Calls position. 

As detailed below, two potential return-on-investment results are: (1) +2.6% absolute return-on-investment (equivalent to +67.6% annualized return-on-investment for the next 14 days) if NVIDIA's share price is in-the-money (i.e. above the $185.00 strike price) and therefore assigned on its December 5th, 2025 options expiration date; and  (2) +6.8% absolute return-on-investment (equivalent to +177.5% annualized return-on-investment for the next 14 days) if NVIDIA's share price is in-the-money (i.e. above the $185.00 strike price) and therefore assigned on its December 5th, 2025 options expiration date.  

NVIDIA Corporation (NVDA) -- New Covered Call Position

Today's buy/write net limit order transaction was as follows:
11/21/2025 Bought 200 NVIDIA Corporation shares at $177.70.

11/21/2025 Sold 2 NVIDIA 12/5/2025 $185.00 Call options @ $4.50 per share.  The Implied Volatility of these Calls was 52.0 when this position was established.  

Two possible overall performance results (including commissions) for this NVIDIA Corporation Covered Call position is as follows:
Covered Calls Net Investment: $34,641.34
= ($177.70 - $4.50) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$898.66
= ($4.50 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 200 NVIDIA shares close at the unchanged purchase price of $177.70 per share on the 12/5 options expiration date): +$0.00
+($177.70 closing price at expiration - $177.70 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If 200 NVIDIA shares assigned (i.e. above the $185.00 strike price) on the 12/5 options expiration date): +$1,460.00
+($185.00 strike price - $177.70 stock purchase price) * 200 shares

1. Total Net Profit Potential (close at the unchanged purchase price of $177.70 per share on the 12/5 options expiration date): +$898.66
= (+$898.66 option income + $0.00 dividend income - $0.00 capital appreciation)
2. Total Net Profit Potential (If 200 NVIDIA shares assigned at the $185.00 strike price on the 12/5 options expiration date): +$2,358.66

= ($185.00 strike price - $177.70 purchase price) x 200 shares + $898.66 Call options premium = $1,460.00 + $898.66

1. Potential Absolute Return-on-Investment (If 200 NVDA shares close at the unchanged purchase price of $177.70 per share on the 12/5 options expiration date): +2.6%
= +$898.66/$34,641.34
Potential Annualized Return-on-Investment (If 200 NVIDIA shares close unchanged at the original $177.70 stock purchase price on the 12/5 options expiration date): +67.6%
= (+$898.66/$34,641.34) * (365/14 days)
2. Potential Absolute Return-on-Investment (If 200 NVIDIA shares assigned at the $185.00 strike price on the 12/5 options expiration date): +6.8%
= (+$2,358.66/$34,641.34)

Potential Annualized Return-on-Investment (If 200 NVIDIA shares assigned at the $185.00 strike price on the 12/5 options expiration date): +177.5%
= (+$2,358.66/$34,641.34) * (365/14 days)