Maria's Trade Watch · NVDA

The Long-Runway Put: My Approach to Selling Long-Dated Puts

This week's trade idea: the NVDA January 15, 2027 $185 short put.

NVDA was trading at $208.48 heading into earnings after a pullback, with earnings-related volatility supporting the option premium. That combination created the opportunity: a lower share price, stronger premium and more time for NVDA to recover after the event.

The Trade

Sell the January 15, 2027 $185 put for a proposed $9.50 credit, or $950 per contract. The position opens with 144 DTE and approximately $2,200.61 in buying power. The $950 credit equals 43.2% of the opening buying power, giving this trade strong capital efficiency at entry.

Why This Setup Works

The most important part of a Long-Runway Put is the entry. These trades are put on when NVDA is down and volatility is up — not after the stock has already bounced. The pullback provides a better strike, while stronger volatility supports the premium.

In this snapshot, NVDA's IV Rank was 39.1 and the January expiration carried approximately 43.2% implied volatility — supportive, but not extreme. A rebound in NVDA and a decline in implied volatility can both reduce the put's value well before expiration.

Why the $185 Strike

The $185 strike is 11.3% below NVDA's $208.48 share price. After the $9.50 premium, the effective purchase price falls to $175.50 — approximately 15.8% below the stock at entry. The put carries a 27 delta, providing a meaningful premium while keeping the assignment price at a level Maria is comfortable accepting.

The Plan

The intention is not to hold the put until January. The plan is to close in no more than 80 days after capturing 65% to 70% of the premium. That equals $617.50 to $665, or 28.1% to 30.2% of the $2,200.61 opening buying power. Buying-power requirements can increase if NVDA falls or volatility expands, so the opening figure is not a guaranteed maximum.

What the ROR Is Really Showing

The option chain displayed a 5.01% ROR at the time of the snapshot, based on the platform's prevailing quote and calculation. At the proposed $9.50 credit, the $950 premium equals 5.14% of the $18,500 strike obligation, or 5.41% of the $17,550 effective assignment cost. On portfolio margin, capturing $617.50 to $665 within the 80-day limit represents approximately 28.1% to 30.2% of the $2,200.61 opening buying power. These percentages use different capital bases and should be read separately.

Options involve substantial risk, including assignment and loss of principal. Buying-power requirements can change. Educational only; not investment advice. The author holds and trades NVDA and may hold the position discussed.

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Nvidia Earnings Edition · Aug 26

Nvidia Investors and Traders Know the Routine

The First Reaction Is Not the Final Result — a post-earnings pullback can reset expectations without changing the long-term business story.

When Excellent Is No Longer Enough

Nvidia has created a problem most companies would love to have: being great is no longer enough. Wall Street already expects record revenue, enormous demand for artificial-intelligence chips, strong margins and confident guidance. Those expectations are built into the stock before the company reports.

That changes the earnings test. A routine beat may satisfy the spreadsheet and still disappoint the market. Nvidia must deliver an exceptional quarter, then convince investors that demand, execution and profitability can remain exceptional in the quarter ahead.

Great Results, Falling Stock

February showed how high the bar has become. Nvidia reported quarterly revenue of $68.1 billion, up 73% from a year earlier. Data-center revenue reached $62.3 billion, up 75%. Adjusted earnings were $1.62 per share, and management guided the following quarter to roughly $78 billion in revenue.

The stock nevertheless fell 5.5% the next day to $184.89, erasing roughly $259 billion in market value. The headline numbers were excellent. The reaction reflected a different debate: how much excellence was already priced in and whether margins and guidance could keep clearing an increasingly high bar.

Why the First Move Can Mislead

An earnings-day decline does not automatically mean investors rejected the business. It can mean the market is adjusting its expectations, taking profits or demanding stronger evidence about the next quarter. That distinction matters when evaluating a company whose growth remains strong.

The February Reset

After closing March at $174.40, Nvidia rallied to $235.74 on May 14 — a $61.34 rebound. At $208.48 on August 24, shares remained $23.59 above the immediate February post-earnings close. The pullback changed the entry price; it did not settle the stock's final direction.

Five Reports, Four Declines

Nvidia beat expectations in each of the five periods below, yet shares declined on the next trading day after four reports.

The immediate reaction is only the opening verdict.

What Other Earnings Reactions Show

From each stock's latest earnings-reaction close through August 24, some moves continued while others faded or reversed.

Microsoft and Palantir extended their gains. Amazon kept most of its jump but surrendered $9.51. Nvidia gave back $11.03, while Google and Micron experienced much larger reversals. The first move can continue, fade or reverse as investors reassess the quarter.

Valuation Demands Context

At roughly 23 to 25 times forward earnings, Nvidia recently traded below the Nasdaq-100's multiple of about 26 and far below AMD's multiple above 70. Nvidia is not cheaper than every large technology company, but its valuation is restrained relative to expected growth. Its trailing P/E was also about 31% below its 10-year average.

What Wall Street Needs to Hear

Another clean beat is only the starting point. Investors want exceptional guidance, durable AI demand, proof of customer returns, smooth execution across Blackwell and the next platform cycle, adequate supply, disciplined margins and any improvement in China. If guidance only matches what investors assumed, traders may still sell the news.

A Pullback Can Create the Entry

For investors who already want Nvidia exposure, temporary weakness can be useful. A lower price can create room to scale into shares rather than chase pre-earnings excitement. It can also create an opportunity to sell puts at a strike where ownership would make sense, collecting premium while accepting the possibility of assignment.

That approach still requires discipline. A pullback is not automatically a bargain, and selling puts can create an obligation to buy shares during a deeper decline. The decision should begin with a price the investor is genuinely willing to own, appropriate position sizing and enough cash to handle assignment.

The Practical Takeaway

The earnings-day move may be noisy, but the opportunity is straightforward: separate the company's long-term performance from the market's short-term expectations, then use the reset only when the price and risk fit the plan.

Sources: Nvidia investor relations; Reuters; historical closing prices from Nvidia, Digrin, Investing.com and Stock Analysis. Market prices through August 24, 2026.

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