Options Corner: NVDA

Core Viewpoint - Nvidia is facing regulatory scrutiny in China for alleged violations of anti-monopoly laws, leading to a decline in its stock price despite a strong performance over the past year [1]. Company Performance - Nvidia's stock has increased by over 52% in the past trading year, reaching an all-time high of 184 last month [1][2]. - The company's market capitalization is approximately $4.3 trillion [1]. Technical Analysis - Recent trading patterns indicate a slowdown in momentum, with bearish divergence observed on the RSI as prices reached higher closes [2][3]. - A triangular price pattern has formed, with key support around 165 and resistance near 185 [4][5]. - The expected trading range for Nvidia's stock is between 163 and 187, with significant trading volume noted around the 170 and 180 price levels [6][7]. Options Strategy - A cash-secured put strategy is being considered, with a focus on the October 3rd weekly cycle and a strike price of 170 [10][11]. - This strategy allows for a cushion of over 4% below the current trading price, providing a break-even point at approximately 166.80 [11][12]. - The probability of the 170 strike put being out of the money at expiration is around 63%, indicating a high likelihood of retaining the premium collected from the trade [15].