Unusual Option Opportunity In Nvidia

According to Options and Volatility, shares of Nvidia Corporation NVDA saw unusually high options activity on Monday. Notably, the October 23 calls traded 9,277 contracts versus only 86 open interest, with August call options also seeing above average volume as well.

In addition to the increased volume, the implied volatility on the October 23 calls rose, moving from 28.85 percent on Friday's close to 31.27 percent on the close Monday, an increase of nearly 8.5 percent. This set up a covered call opportunity, buying shares of Nvidia and selling a October 23 call for each 100 shares purchased.

Options and Volatility noted this captures a 1.16 percent edge and positions bullishly along with the large call buyer. The October 23 calls have a delta of 62, while the covered call position has a slightly less bullish delta of 38. Nvidia had earnings last week, with the stock rallying on the earnings beat.

Shares closed Monday at $23.78, up $0.80.

Disclosure: The author had no position in Nvidia at time of publishing.