Friday, January 2, 2026

Established Covered Call in NVIDIA Corporation

A Covered Call position of two weeks duration was established today in NVIDIA Corporation (ticker NVDA).  My net buy/write limit order at $181.20 was executed by simultaneously purchasing one hundred shares at $188.64 and selling one January 16th, 2026 Call option at the $185.00 strike price at $7.44 per share, which provides a $3.80 per share = [$7.44 Call option premium received - ($188.64 stock purchase price - $185.00 option strike price)] time value profit potential.  Since NVIDIA is my #1 preferred megacap tech company investment at present, this new position continues my recent practice of having a NVIDIA Covered Call position expiring each week.  A slightly in-the-money Covered Call position was established for this new position with the probability that NVIDIA's stock will close in-the-money on the 1/16/2026 options expiration date was 60.1% when this transaction was executed.  As I prefer, the next earnings report on February 25th, 2026 is after the 1/16/2026 options expiration date. 

As detailed below, a potential return-on-investment result is +2.1% absolute return-on-investment (equivalent to +54.6% 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 January 16th, 2026 options expiration date.  

NVIDIA Corporation (NVDA) -- New Covered Call Position

Today's buy/write net limit order transaction was as follows:
1/2/2026 Bought 100 NVIDIA Corporation shares at $188.64.
1/2/2026 Sold 1 NVIDIA 1/16/2026 $185.00 Call option @ $7.44 per share.  

A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Call position is as follows:
Covered Call Net Investment: $18,120.67
= ($188.64 - $7.44) * 100 shares + $.67 commission

Net Profit:
(a) Option Income: +$743.33
= ($7.44 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 100 NVIDIA shares assigned at the $185.00 strike price at expiration): -$364.00
+($185.00 strike price - $188.64 stock purchase price) * 100 shares

Total Net Profit Potential (If 100 NVIDIA shares in-the-money and therefore assigned at the $185.00 strike price at the options expiration date): +$379.33
= (+$743.33 option income + $0.00 dividend income - $364.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.1%
= +$379.33/$18,120.67
Potential Annualized Return-on-Investment: +54.6%
= (+$379.33/$18,120.67) * (365/14 days)