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 $175.67 was executed by simultaneously purchasing two hundred shares at $180.02 and selling two March 13th, 2026 weekly Call options at $4.35 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 3/13/2026 options expiration date was 37.6% when this transaction was executed. 

NVIDIA reported their Q4 earnings after the market close two days ago. They substantially beat analysts' estimates on all relevant metrics including both earnings and revenue (which at $68.1 billion was 72.4% above the comparable quarter last year). In addition, their next quarter guidance at $78 billion is 76.9% above last year.  Very surprisingly, their stock reacted very negatively yesterday.  But I agree with the numerous sell-side equity research firms that raised their NVIDIA post-earnings target prices to approximately +40% above the $180.02 price I paid today.  In short, I decided that the negative price reaction to earnings is unwarranted -- so this morning I established this new Covered Calls position. 

As detailed below, two potential return-on-investment results are: (1) +2.5% absolute return-on-investment (equivalent to +64.6% annualized return-on-investment for the next 14 days) if NVIDIA's share price is unchanged at the $180.02 stock purchase price on the March 13th, 2026 options expiration date; and  (2) +5.3% absolute return-on-investment (equivalent to +138.5% 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 March 13th, 2026 options expiration date.  

NVIDIA Corporation (NVDA) -- New Covered Call Position

Today's buy/write net limit order transaction was as follows:
2/27/2026 Bought 200 NVIDIA Corporation shares at $180.02.

2/27/2026 Sold 2 NVIDIA 3/13/2026 $185.00 Call options @ $4.35 per share.  The Implied Volatility of these Calls was 44.8 when this position was established, well above (as preferred) the VIX which was at 20.7.  
3/11/2026 Ex-dividend of $.01 per share.  This miniscule dividend amount for the largest market cap company is ludicrous. 🤣

Two possible overall performance results (including commissions) for this NVIDIA Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $35,135.34
= ($180.02 - $4.35) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$868.66
= ($4.35 * 200 shares) - $1.34 commission
(b) Dividend Income: +$2.00 = $.01 per share x 200 shares
(c) Capital Appreciation (If 200 NVIDIA shares close at the unchanged purchase price of $180.02 per share on the 3/13/2026 options expiration date): +$0.00
+($180.02 closing price at expiration - $180.02 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If 200 NVIDIA shares assigned (i.e. above the $185.00 strike price) on the 3/13/2026 options expiration date): +$996.00
+($185.00 strike price - $180.02 stock purchase price) * 200 shares

1. Total Net Profit Potential (If stock price closes at the unchanged purchase price of $180.02 per share on the 3/11/2026 options expiration date): +$870.66
= (+$868.66 option income + $2.00 dividend income + $0.00 capital appreciation)
2. Total Net Profit Potential (If 200 NVIDIA shares assigned at the $185.00 strike price on the 3/13/2026 options expiration date): +$1,866.66

= (+$868.66 option income + $2.00 dividend income + $996.00 capital appreciation)

1. Potential Absolute Return-on-Investment (If 200 NVDA shares closing price is unchanged at the original purchase price of $180.02 per share on the 3/11 options expiration date): +2.5%
= +$870.66/$35,135.34
Potential Annualized Return-on-Investment (If 200 NVIDIA shares closing price is unchanged at the original $180.02 stock purchase price on the 3/11/2026 options expiration date): +64.6%
= (+$870.66/$35,135.34) * (365/14 days)

2. Potential Absolute Return-on-Investment (If 200 NVIDIA shares assigned (i.e. sold) at the $185.00 strike price on the 3/11/2026 options expiration date): +5.3%
= (+$1,866.66/$35,135.34)

Potential Annualized Return-on-Investment (If 200 NVIDIA shares assigned at the $185.00 strike price on the 3/11/2026 options expiration date): +138.5%
= (+$1,866.66/$35,135.34) * (365/14 days)