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The wheel on Nvidia (NVDA): the split, the gaps, and the cash it takes

Nvidia is one of the most searched names for the wheel. The split brought 100 shares within reach of more accounts, and the premiums look rich. Here's what that premium is paying you for, worked out with a loss.

Options guide · 8-minute read · Updated 2026-10-26

What Nvidia is like for the wheel

Nvidia (NVDA) designs the chips that power most AI computing, plus gaming and data-center hardware. As of October 2026 it is one of the largest companies in the world, and its options trade in huge numbers every day.

For the wheel strategy, that gives you:

• Very liquid options. Tight spreads on the strikes near the price, lots of Open interest, and weekly expiries.
• Implied volatility above most mega-caps. The market expects bigger moves from NVDA than from a giant like Apple or Microsoft. That is why the premium looks rich.
• Quarterly earnings that move a whole sector. An Nvidia report can swing chip stocks across the market, and NVDA itself often gaps the next morning.
• News risk between earnings. Export rules, big customers changing plans, or a rival's announcement can move it hard on an ordinary day.
• A tiny dividend. It is too small to matter for the wheel. Don't count on it to cushion anything.

Nvidia is on this page because people search for it. Nothing here is a recommendation.

What the stock split changed, and what it didn't

Nvidia split its shares 10-for-1 in June 2024, after a 4-for-1 split in 2021. A split gives you more shares at a lower price each. The company's value doesn't change.

What it changed for the wheel: one contract still covers 100 shares, so a lower share price means a smaller sum per contract. After the split, 100 shares cost a tenth of what they did before. That brought NVDA within reach of many more accounts.

What it didn't change: 100 shares of NVDA is still a large position. Before you look at a single premium, take today's price and multiply it by 100. That is the cash a cash-secured put will lock up, and the size of the stock position you'll hold if you're assigned.

If a company you wheel announces a split while you hold a contract, the contract is adjusted for you. See selling options on a stock about to split.

The gap problem

A gap is when a stock opens far from where it closed, with no trading in between. You don't get a chance to act. Your put strike can be skipped over in one move.

High-volatility names gap more often, and NVDA has fallen by double digits in a single day more than once. A short put has no stop at your strike. If the stock opens far below it, you buy at the strike anyway, and the loss is there before you can react.

The premium is the market's price for that risk. A rich premium isn't a gift. It's a warning about how far the stock might move.

A gap through the strike (an illustration, not a trade idea)

The numbers are for a made-up chip stock, XYZ. They are not Nvidia's prices.

Month 1. XYZ is at $200. You sell a 30-day $180 put for $4.00. You collect $400. Your broker sets aside $18,000. Earnings land inside the trade. XYZ gaps down to $150 and stays there. You're assigned 100 shares at $180.

Month 2. You sell a $180 call, at your purchase price, for $1.00 ($100). That far above the stock, it pays little. XYZ drifts to $145. The call expires.

Month 3. Tired of tiny premiums, you sell a $160 call for $3.00 ($300). That strike is below the $180 you paid. XYZ bounces to $175. Your shares are called away at $160.

Three months in, you collected $800 in premium and lost $1,200. The bounce you waited for came, and the call below your cost sold your shares before it arrived.

How much cash one contract really needs

On a stock like NVDA, one contract is the smallest size you can trade. You can't sell a quarter of a put. That makes the sizing question simple and blunt:

1. Price today × 100 = the cash for one put.
2. Is that a sensible share of your account for a single chip stock? Many people cap one name at a small slice of the account.
3. If the stock fell 25% overnight, what would that loss be in dollars? Could you hold through it calmly?

If any answer is no, the contract is too big for the account, whatever the premium says. A smaller, steadier stock or an ETF may fit better. Is selling options gambling? covers why size, not strike, is usually the deciding rule.

Account note: covered calls are widely allowed in a TFSA or RRSP; cash-secured puts depend on the broker. Options permissions also differ by broker in the US and Canada, so check yours before you plan the trade.

Before you wheel it

• Check the earnings date. If it falls inside your expiry, you're selling the earnings gap. Know that you're doing it. After the report, the premium often shrinks fast; see IV crush explained.
• Pick the strike as the price you'd own it at with no option attached. If you wouldn't buy 100 shares there today, don't sell the put there.
• Write down the plan for a gap. Hold the shares? Sell them? At what price on the chart, such as the last place price turned around?
• Never sell a call below your cost unless you've decided you're fine selling the shares at that price.

Questions