CNBC contributor Michael Khouw’s proposed Nvidia covered call could have generated $410 in gross premium at the Nov. 13 bid, though the shareholder would retain the risk of a sharp decline.
Nvidia’s board accepted CEO Jensen Huang’s resignation Wednesday, Nov. 11, effective immediately, and appointed Chief Financial Officer Colette Kress as interim CEO, a Form 8-K filing says. On Thursday, Nov. 12, the company said the board had begun seeking a permanent CEO and would consider candidates from inside and outside Nvidia. EconoTimes previously covered reports of board discussions over Huang’s future.
Khouw’s idea combined 100 Nvidia shares with a call option at a $185 strike that expires Dec. 18, 2026, CNBC reported Friday, Nov. 13. Nvidia closed that day at $162.85, down 31.9% from its Oct. 6 close of $239.24, based on Yahoo Finance historical prices.
Optionistics lists the call with a $4.10 bid and $4.15 ask on Nov. 13, along with implied volatility of 56.04%. A standard option contract covers 100 shares, so a sale at the bid would mean $410 in gross premium before costs. That amount assumes a fill at the quoted bid. Optionistics provides no intraday timestamp for the quote.
Premium income would lower the trade’s net cost, but it cannot prevent a substantial loss if Nvidia falls. If Nvidia rises above $185 and the buyer exercises the call, the seller may have to deliver the shares at that strike and miss further gains beyond it. The Options Industry Council says covered-call sellers remain exposed to substantial losses in a falling market.
CNBC reported Khouw’s view that uncertainty around Nvidia’s leadership could keep option premiums elevated for months. The 56.04% implied-volatility figure is a single-date reading for this contract and does not show how long volatility may stay elevated.
Nvidia is scheduled to report fiscal 2027 third-quarter results Tuesday, Nov. 17, at 4:20 p.m. ET (21:20 UTC), followed by a conference call at 5 p.m. ET (22:00 UTC).
