Nvidia (NVDA) has become the first $4 trillion company ever. During the “Liberation Day” April lows, the chip darling nearly tucked under $2 trillion in market cap when the stock acutely sold off to a low intraday print of $86.62. The leading AI stock has been on a parabolic move jumping nearly 70% higher and I believe it is now time to book profits for those who own this wild child. I realize that there is potentially more room to run on this tech favorite, but I want to use options to take some money off the table. Nvidia is now the world’s most valuable company, surpassing both Apple and Microsoft. Those two (also Mag 7 members) hit the $3 trillion mark prior to Nvidia. Microsoft is also one of Nvidia’s biggest and most important customers. Jensen Huang’s is the first CEO to lead a company in achieving this magnitude of a market valuation. Nvidia spent three decades building a business worth $1 trillion. It spent two years turning itself into a $4 trillion company. This is flat out remarkable.. I am aware that nothing on the horizon really sits as a headwind for Nvidia, but I reflect on an old adage that I learned during the decade I spent in the trading pits in Chicago. “Pigs get fat, hogs get slaughtered.” I was fortunate enough to have bought NVDA stock on the April dip and it has been very tempting to sell the underlying stock or sell any call options as it has climbed in recent months. I somehow refrained. With the market cap milestone met, I believe I now have a contrarian reason to establish an option position in the event markets (or NVDA) take a breather and retrace lower. I am using a risk reversal specifically since I am still long the underlying. In the event you are not long the stock, you will want to consider buying an upside call to define your risk as being short naked calls in NVDA is not suggested. The Trade (Risk Reversal) Sold the NVDA $170 8/22/2025 Call for $6.80 Bought the NVDA $150 8/22/2025 Put for $2.75 This trade was executed when NVDA was trading up around $166 This is a credit spread allowing an investor to profit $4.05 or $405 per one lot DISCLOSURES: (Long this spread and NVDA) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
