Covered Calls
for NVDA

What is a covered call?

A covered call is an options income strategy where for every 100 shares of a stock or ETF that you own, you can sell a call option against those shares. You receive income upfront. If the stock stays below the strike price through expiration, the call expires worthless and you keep the income. If it rises above the strike, you may be required to sell your shares at that strike price.

When looking for trade ideas, you can use our option screener for covered calls with a high probability of profit and annualized return, as well as steady dividends and robust fundamentals.

How do covered calls generate income?

Covered calls generate income because you receive a premium upfront when you sell a call option against shares you already own. That income provides additional return on a stock position, especially if the stock trades sideways, rises modestly, or remains below the strike price through expiration. Income potential depends on stock price, strike, expiration date, implied volatility, and options liquidity.

What is a covered call on NVDA?

A covered call on NVDA means you own at least 100 shares of NVIDIA and sell one call option against those shares. The example here — the Dec 18, 2026 $290.00 call — collects $350.00 premium (1.56% yield, 89.22% probability). You keep the premium if NVDA closes below $290.00 at expiration. If NVDA rises above $290.00, your shares may be called away at that price.

What should I look for besides income?

Look beyond income alone. Important factors include the stock's trend, expiration date, strike price, the option's bid/ask spread, probability of assignment, upcoming earnings or dividends, and whether the income is worth the capped upside. OptionsPlay uses annualized yield, IV Rank, and Options Liquidity Rank to help evaluate quality opportunities.

What are the best stocks for covered calls?

The best stocks for covered calls are typically ones you are comfortable owning, with liquid options and enough income potential to justify the strategy. Look for stocks with stable or moderately bullish outlooks, active options markets, reasonable bid/ask spreads, and no major event risk before expiration. OptionsPlay's Highest Yielding Covered Call Report automates this process.

How can I find high-yielding covered call opportunities?

Screen for stocks and ETFs with liquid options and expirations and strike prices that fit your objective. A strong process should help you filter for income while evaluating risk, liquidity, earnings timing, and whether the strategy fits your outlook. OptionsPlay's Highest Yielding Covered Call Report ranks candidates by income potential and quality filters.

How often should you sell covered calls?

The right frequency depends on your objective, risk tolerance, transaction costs, and willingness to manage the position. Weekly covered calls provide more frequent income but require more active management. Monthly covered calls may offer a more balanced approach. OptionsPlay generally favors expirations in the 30–45 day range for an attractive balance of income and manageability.

How do I choose the best expiration and strike price?

OptionsPlay's research and backtesting shows covered calls in the 30–45 day-to-expiration range have historically provided an attractive balance of income, time decay, and manageability. For strike selection, OptionsPlay generally favors selling calls farther out of the money, around the 10–15 delta range, when the goal is to prioritize stock appreciation while still generating income.

What is the max profit and risk on this NVDA covered call?

The maximum reward on the Dec 18, 2026 $290.00 NVDA covered call is $6,552.00. The maximum risk is $22,448.00 — the cost of holding the shares minus the premium received. The breakeven is $224.48. Below this price at expiration, the position results in a net loss after accounting for the $350.00 premium received.

What are the risks associated with a covered call?

A covered call does not add additional risk to your portfolio beyond owning the stock. Your primary downside risk is the stock declining — the premium received reduces that risk by lowering your breakeven. The main tradeoff is capped upside: if NVDA rises above $290.00, your shares may be called away, limiting your gains on the stock position.

When should you roll a covered call?

Consider rolling when the stock has moved closer to or above the strike price, when assignment risk has increased, or when you want to extend the trade. Rolling involves buying back the existing call and selling another with a later expiration, a different strike, or both. OptionsPlay's Portfolio tool can help you track when it may be time to roll or adjust a position.

Should I sell covered calls before earnings?

Selling covered calls before earnings can generate higher income because implied volatility often rises ahead of major announcements. NVDA does not currently have a confirmed earnings date, but the Dec 18, 2026 expiration is 113 days away, so a quarterly report will most likely be scheduled within that holding period — treat this trade as carrying earnings risk rather than being free of it. If NVDA falls sharply on a report, the income may not provide enough protection. If it rises sharply, your upside is capped. Check the earnings calendar for a confirmed date before entering, and size and monitor the position on the assumption that a report may land before expiration.