Nvidia Corporation (NASDAQ:NVDA) shares ripped to a new record high this morning right out of the gate. The red-hot chip company traded as high as $192.95 before profit-takers rushed in to ring the register.
With today’s jump, NVDA is now up 77% year-to-date.
The catalyst for this morning’s instant gains was Nvidia’s announcement of its new Drive PX Pegasus platform.
Chart watchers with NVDA in their scope won’t find today’s jump all that surprising. The stock scored a breakout just yesterday, signaling additional upside was highly likely. The fact that the upside arrived so quickly in the form of an overnight gap is merely icing on the cake.
But that has been the story of Nvidia shares for months now. Breakouts litter the landscape, and the trend keeps trending. With today’s pop, the stock is well above all major moving averages, and it carries the host of benefits afforded to stocks perched at record highs. The implications are myriad.
It means not a single soul on earth holding NVDA shares is losing money. It means any poor bears short the stock are experiencing more pain than ever. And it means those who have long since parted with their shares are looking on with more regret than ever.
I could go on, but you get the picture. Stocks at all-time highs have the wind at their back.
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The NVDA Stock Trade
With earnings looming on Nov. 9, implied volatility has already begun its pre-earnings ramp. The implied vol rank is at 53%, suggesting NVDA options are already pumped. And that has me leaning towards a spread trade versus buying options outright.
Buy the Dec $190/$210 bull call spread for around $6.90. This sets you up to capitalize on a move towards $210 by year-end. The risk is limited to $6.90 and will be forfeited if the stock sits below $190 at expiration.
The reward is limited to $13.10, granting a sizeable potential profit if Nvidia can rise above $210 in the coming months.
As of this writing, Tyler Craig held bullish options positions in NVDA. Want to learn how to master the art of option selling for high-probability cash flow? Check out Tyler’s recently released video series through Tackle Trading on how to systematically sell iron condors for monthly income.
