Nvidia Stock Is Up Over 103% YTD - Making Shorting Its Puts Attractive For Income Plays

Barchart2023-05-17

Nvidia Corp stock is up over 103% YTD, including 10%+ in the last month. NVDA stock is trading at $296.89 on May 16, up from $146.14 where it ended last year. This activity has pushed up its put ...

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Great Joy
2023-05-17
Great Joy
Thanks

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This activity has pushed up its put ...</p>\n\n<a href=\"https://www.barchart.com/story/news/16933438/nvidia-stock-is-up-over-103-ytd-making-shorting-its-puts-attractive-for-income-plays\">Source Link</a>\n\n</div>\n","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia Stock Is Up Over 103% YTD - Making Shorting Its Puts Attractive For Income Plays</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia Stock Is Up Over 103% YTD - Making Shorting Its Puts Attractive For Income Plays\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-05-17 14:38 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barchart.com/story/news/16933438/nvidia-stock-is-up-over-103-ytd-making-shorting-its-puts-attractive-for-income-plays><strong>Barchart</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia Corp  stock is up over 103% YTD, including 10%+ in the last month. NVDA stock is trading at $296.89 on May 16, up from $146.14 where it ended last year. This activity has pushed up its put ...</p>\n\n<a href=\"https://www.barchart.com/story/news/16933438/nvidia-stock-is-up-over-103-ytd-making-shorting-its-puts-attractive-for-income-plays\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"NVDA","symbol_name":"英伟达","start_time":0,"source_url":"https://www.barchart.com/story/news/16933438/nvidia-stock-is-up-over-103-ytd-making-shorting-its-puts-attractive-for-income-plays","article_id":"1126145654","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1126145654","pubTimestamp":1684305495,"columns":[],"sourceInfo":null,"weMediaInfo":null,"summary":"Nvidia Corp  stock is up over 103% YTD, including 10%+ in the last month. NVDA stock is trading at $","collect":0,"end_time":0,"defaultTopTitle":"barchart.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NVDA":"英伟达"},"translate_title":"Nvidia股票年初至今上涨超过103%，这使得做空其看跌期权对收益股具有吸引力","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NVDA":0.9},"content_text":"Nvidia Corp  stock is up over 103% YTD, including 10%+ in the last month. NVDA stock is trading at $296.89 on May 16, up from $146.14 where it ended last year. This activity has pushed up its put option premiums and made shorting out-of-the-money puts ideal for investors to create income.I discussed this in my last article on April 24, “Nvidia Stock Is on a Tear Up 86% YTD - Pushing Its Put Premiums Sky High.” This move upward since then is despite the fact that NVDA stock has a sky-high valuation. For example, at the time its price-to-earnings (P/E) multiple was 60x, but now it is 64x for the year ending Jan. 2024, according to Seeking Alpha. Moreover, analysts forecast earnings per share of $6.13 for 2024, pushing the forward P/E for the year ending Jan. 25 down to 47.3x.AI Gold RushThe reason for this excessive enthusiasm for the stock is related to the push for AI products by virtually every tech company. In fact, one article summarized it simply like this: “Nvidia is the picks and shovel leader in the ‘AI gold rush,’ BofA says.\"The BofA analyst, Vivek Arya, wrote that generative AI demand is pushing demand for Nvidia's super-powerful semiconductor chips. Nvidia CEO Jensen Huang discussed this move into AI chips with CNBC in late March. He said that the appeal of AI is that it is a brand-new computing platform you can program with your own language. He said that “no application in the world has been so easy to use and so effective when you tell it to do something” - referring to generative ChatGPT AI apps. This is now the fastest-growing in the world as a result. This is what is powering Nvidia's next-gen chips, which are “democratizing AI” computer programing capabilities for all users.One Play Is Short OTM PutsIn my prior article, I wrote that the put options expiring this Friday, May 19 were very attractive on April 24. For example, the $250 strike price puts, which were 7.8% below the spot price at the time, traded for $4.05 per put. That provided an attractive 1.62% income yield (i.e., $4.05/$250) with 27 days left in the period. Today, those $250 puts are now trading for just 3 cents on the ask side. In other words, that trade has been a huge success, and the investor will likely want to roll that over by buying back the short put. They can now do another similar trade for one month forward.For example, for the June 9 expiration period, which is 24 days from now, the $270 strike price puts trade at $5.15 per put. This provides an attractive 1.91% yield based on the strike price (i.e., $5.15/$270), for a strike price that is 8.52% below today's spot price of $296.89NVDA Puts - Expiring June 9 - Barchart - As of May 16, 2023That means that the investor who secures $27,000 with their brokerage firm in cash and/or margin, can then enter an order to “Sell to Open” 1 put contract at $270.00 for expiration on June 9. Their account will immediately receive $515.00. That is why this is an attractive 1.91% yield for the investor.In fact, if this trade can be repeated each month for a year, the investor would make 22.89% annually. This is an attractive way for long investors in NVDA stock to create income. Moreover, if the stock falls to this $270 strike price in three weeks the investor gets to purchase the stock at a discount. Given the enthusiasm for this AI gold rush stock, that is a good way for long-term investors to make income while waiting for the stock to keep moving higher.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9970856581,"gmtCreate":1684310248543,"gmtModify":1684310251647,"author":{"id":"4111809398482662","authorId":"4111809398482662","name":"Great Joy","avatar":"https://community-static.tradeup.com/news/60d4182388f8b85c577b0310c872c28d","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4111809398482662","authorIdStr":"4111809398482662"},"htmlText":"Thanks&nbsp;","listText":"Thanks&nbsp;","text":"Thanks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9970856581","repostId":1126145654,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":11,"commentSize":1,"repostSize":1,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1126145654"}