A trading strategy to ride out the Nvidia uncertainty and generate income in the process

A trading strategy to ride out the Nvidia uncertainty and generate income in the process

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The uncertainty around Nvidia stock provides an opportunity for options traders

Jensen Huang's abrupt resignation has sent shockwaves through the tech sector, dragging Nvidia's (NVDA) stock down roughly 30% since Oct. 6. The market despises uncertainty, and losing a visionary founder, particularly one without a well-telegraphed succession plan, makes it worse.

However, for opportunistic investors, this panic has made the stock cheaper (obviously) while options have become significantly more expensive. Trading in the $160s, Nvidia's valuation has taken a big haircut, yet its underlying business fundamentals remain largely intact. While Huang was the architect of Nvidia's AI dominance, the company's moat — superior GPUs, the CUDA software ecosystem, and networking expertise — does not walk out the door with him. The company's structural advantage in the global artificial intelligence rollout persists.

By deploying a persistent covered call strategy, investors can leverage the exact fear driving the stock down to generate robust, risk-reducing income while maintaining exposure to the undeniable future of AI.

Disclosures: Tidal owns/holds all the securities mentioned in the article.

All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. This content is provided as part of our editorial output for informational purposes only and does not constitute 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.

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