What are your options - Nvidia earnings trades

Important note: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.

• Bullish strategy

  • Short/Credit Put Vertical Spread
      

• Neutral / range bound strategy

  • Short Iron Condor
     

• Bearish strategies

  • Short/Credit Call Vertical Spread
  • Short/Credit Call Broken Wing Butterfly

Bullish Strategy

Put Credit Spread on Nvidia Corp (NVDA)

• Underlying Stock: NVDA:xnas, Last Traded at $503.91
• Options Details:
  • Sell to Open 1x 470 Put, 15-Dec-2023, Bid/Ask: 11.55/11.65, Delta: -0.2676
  • Buy to Open 1x 460 Put, 15-Dec-2023, Bid/Ask: 8.85/8.95, Delta: 0.0497
• Trade Setup:
  • Type: Limit, Quantity: 1, Price (Credit): 2.75 USD, Duration: G.T.C.
• Financials:
  • Premium (Credit): 275.00 USD
  • Margin Impact: 521.45 EUR (can vary according to your margin profile)
  • Max Risk: -725.00 USD
  • Max Profit: 275.00 USD
  • Breakeven: 467.25 USD
    
    
• The strategy involves selling a 470 put and buying a 460 put with the same expiration date, resulting in a net credit of $275. The breakeven point is $467.25. This trade has a defined risk of $725 and a defined profit of $275, characteristic of a credit spread that suggests a neutral to bullish outlook on the stock.

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Neutral / Range Bound Strategy

Short Iron Condor on Nvidia Corp (NVDA)

• Underlying Stock: NVDA:xnas, Last Traded at $504.02
• Options Details:
  
  • Buy to Open 1x 575 Call, 15-Dec-2023, Bid/Ask: 5.90/6.00, Delta: 0.1806
  • Sell to Open 1x 570 Call, 15-Dec-2023, Bid/Ask: 6.65/6.75, Delta: 0.1984
  • Sell to Open 1x 470 Put, 15-Dec-2023, Bid/Ask: 11.60/11.70, Delta: -0.2684
  • Buy to Open 1x 465 Put, 15-Dec-2023, Bid/Ask: 10.15/10.25, Delta: -0.2433
• Trade Setup:
  
  • Type: Limit, Quantity: 1, Price (Credit): 2.00 USD, Duration: G.T.C.
• Financials:
  
  • Premium (Credit): 200.00 USD
  • Margin Impact: 87.31 EUR (may varry according to margin profile)
  • Max Risk: -300.00 USD
  • Max Profit: 200.00 USD
  • Breakeven Points: 468.00 USD, 572.00 USD
    
    
• The net credit received is $200. The breakeven points are $468.00 and $572.00. This trade has a defined risk of $300 and a potential profit of $200, characteristic of an iron condor strategy that suggests a neutral outlook on the stock.

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Bearish Strategies

Call Credit Spread on Nvidia Corp (NVDA)

• Underlying Stock: NVDA:xnas, Last Traded at $504.04
• Options Details:
  • Buy to Open 1x 550 Call, 24-Nov-2023, Bid/Ask: 4.75/4.80, Delta: 0.1943
  • Sell to Open 1x 540 Call, 24-Nov-2023, Bid/Ask: 6.65/6.75, Delta: 0.2518
• Trade Setup:
  • Type: Limit, Quantity: 1, Price (Credit): 3.30 USD, Duration: G.T.C.
• Financials:
  
  • Premium (Credit): 330.00 USD
  • Margin Impact: 593.42 EUR
  • Max Risk: -670.00 USD
  • Max Profit: 330.00 USD
  • Breakeven: 543.30 USD
    
    
• The strategy involves buying a 550 call and selling a 540 call with the same expiration date, resulting in a net credit of $330. The breakeven point is $543.30. This trade has a defined risk of $670 and a defined profit of $330, characteristic of a call credit spread that suggests a neutral to bearish outlook on the stock.

Call Broken Wing Butterfly on Nvidia Corp (NVDA)

• Underlying Stock: NVDA:xnas, Last Traded at $504.12
• Options Details:
  • Buy to Open 1x 560 Call, 24-Nov-2023, Bid/Ask: 3.35/3.45, Delta: 0.1460
  • Sell to Open 2x 540 Call, 24-Nov-2023, Bid/Ask: 6.65/6.75, Delta: 0.2505
  • Buy to Open 1x 532.5 Call, 24-Nov-2023, Bid/Ask: 8.50/8.60, Delta: 0.2992
• Trade Setup:
  • Type: Limit, Quantity: 1, Price (Credit): 1.50 USD, Duration: G.T.C.
• Financials:
  
  • Premium (Credit): 150.00 USD
  • Margin Impact: 751.24 EUR
  • Max Risk: -1,100.00 USD
  • Max Profit: 900.00 USD
  • Breakeven: 549.00 USD
    
    
• The strategy involves buying a 560 call, selling double the amount of 540 calls, and buying a 532.5 call with the same expiration date, resulting in a net credit of $150. The breakeven point is $549.00. This trade has a defined risk of $1,100 and a defined profit of $900, characteristic of a call broken wing butterfly that suggests a neutral to slightly bullish outlook on the stock, if you're aim is to go for the maximum profit. However, if the initial credit received ($150/contract) fits your trading objectives, you could see the strategy as bearish to neutral: as long as the price of NVDA stays below 532.5, you will keep your initial credit. If it rises higher, you still have the "sweet-spot" which could yield you an extra profit. If it goes above the breakeven you're most probably have max loss.

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