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Option Brief: NVIDIA Corporation (NASDAQ:NVDA) touched a near-three-year high of $19.05 last week, but has since pulled back along with the broader equities market. The stock was last seen at $18.22 -- a 0.9% dip from Friday's close -- and it seems one option trader is buying more time for his bullish position to pan out.
The stock's 30-day at-the-money implied volatility is 6.4% higher at 28.5%, hinting at escalating demand for NVDA's short-term options -- especially on the call side. In afternoon trading, roughly 25,000 NVDA calls have changed hands -- more than double the norm, and around nine times the number of puts exchanged. About 80% of the action has transpired at two strikes: the April 18 and June 18 calls, which have each seen more than 10,000 contracts cross the tape.
Digging deeper, it appears the speculator sold a block of 10,000 April 18 calls below the bid price for $0.76 apiece, and used the proceeds to help fund the purchase of June 18 calls, which traded at $1.20 apiece. In other words, the trader rolled out his bullish position on NVIDIA Corporation (NASDAQ:NVDA) by two months. Delta on the June 18 calls stands at 0.55, implying a roughly 55% chance of the contracts finishing in the money at expiration on Friday, June 20.