Nvidia Stock Today: How This Call Ratio Spread Could Earn $1,350

Core Insights - Nvidia has reached a significant milestone as the first company to achieve a $5 trillion market cap, representing nearly 9% of the total market capitalization of the S&P 500 [1] Options Trading Strategy - A call ratio spread can be constructed for Nvidia stock, currently trading around $210, by buying one call option with a 215 strike price and selling two 225 calls, all expiring on December 19 [3] - This trade could be initiated for a credit of $3.50 per set of options, leading to a potential profit of $350 if Nvidia trades below 215 at expiration [4] - The maximum profit occurs if Nvidia closes around 225 on December 19, yielding approximately $1,350, aligning with a 20%-25% profit zone based on prior breakout analysis [4] Risk Assessment - The trade carries unlimited risk if Nvidia rallies sharply above 225, as the trader effectively becomes short a call option [5] - In a worst-case scenario, if Nvidia rises to 270 by December 19, the trade could incur a loss of $3,150, with a break-even point near 238.50 at expiration [6] Earnings Expectations - Nvidia is set to report Q3 earnings on November 19, with earnings per share estimated to rise to $1.24, a 53% increase year-over-year, and revenue projected to spike 56% to $54.71 billion [7]