NVIDIA Put Options Offer 11% Yield and 34% Discount

NVIDIA (NVDA) shares are trading at around $218.99 after underperforming the S&P 500 over the past year but posting strong gains in recent months.

For investors looking to get into AI leader NVIDIA but wary of its high-flying price, selling put options can offer a healthy income and a cheaper entry point if the stock dips.

One strategy involves selling a put option on NVDA expiring September 17, 2027, with a strike price of $155. This would generate around $988 in premium per contract, which works out to about 5.7% annualized on the $15,500 set aside to secure the trade.

If NVIDIA stays above $155 through the expiration date, the put option expires worthless and the full premium is kept as income, while if it closes below $155, the buyer would purchase 100 shares at $155, an effective entry near $145.13 a share after the premium, about a 34% discount to today's price.