I prefer not to hold positions on earnings reporting dates and since NVIDIA reported their earnings yesterday (which were stellar in all respects), I decided to re-establish my normal practice of establishing weekly Covered Call positions in NVIDIA each week.
As detailed below, a potential return-on-investment result if NVIDIA's share price is in-the-money (i.e. above the $212.50 strike price) and therefore assigned on its May 29th, 2026 options expiration date is +1.2% absolute return-on-investment (equivalent to +53.7% annualized return-on-investment for the next 8 days).
NVIDIA Corporation (NVDA) -- New Covered Calls Position
Today's buy/write net limit order transaction was as follows:
5/21/2026 Bought 300 NVIDIA Corporation shares at $219.26.
5/21/2026 Bought 300 NVIDIA Corporation shares at $219.26.
5/21/2026 Sold 3 NVIDIA 5/29/2026 $212.50 Call options @ $9.24 per share. The Implied Volatility of these Calls was 39.5 when this position was established, which is well above (as preferred) the current value of VIX.
A possible overall performance result (including commissions) for this NVIDIA Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $63,008.01
= ($219.26 - $9.24) * 300 shares + $2.01 commission
Net Profit:
(a) Options Income: +$2,769.99
= ($9.24 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 NVIDIA shares assigned (i.e. above the $212.50 strike price) on the 5/29/2026 options expiration date): -$2,028.00
+($212.50 strike price - $219.26 stock purchase price) * 300 shares
Total Net Profit Potential (If 300 NVIDIA shares assigned at the $212.50 strike price on the 5/29/2026 options expiration date): +$741.99
Covered Calls Net Investment: $63,008.01
= ($219.26 - $9.24) * 300 shares + $2.01 commission
Net Profit:
(a) Options Income: +$2,769.99
= ($9.24 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 NVIDIA shares assigned (i.e. above the $212.50 strike price) on the 5/29/2026 options expiration date): -$2,028.00
+($212.50 strike price - $219.26 stock purchase price) * 300 shares
Total Net Profit Potential (If 300 NVIDIA shares assigned at the $212.50 strike price on the 5/29/2026 options expiration date): +$741.99
= (+$2,769.99 options income + $0.00 dividend income - $2,028.00 capital appreciation)
Potential Absolute Return-on-Investment (If 300 NVIDIA shares assigned (i.e. sold) at the $212.50 strike price on the 5/29/2026 options expiration date): +1.2%
= (+$741.99/$63,008.01)
Potential Annualized Return-on-Investment (If 300 NVIDIA shares assigned at the $212.50 strike price on the 5/29/2026 options expiration date): +53.7%
= (+$741.99/$63,008.01) * (365/8 days)
= (+$741.99/$63,008.01) * (365/8 days)
