Nvidia Options Pricing Maps a $6 Trillion Valuation Threshold

Nvidia shares would need to reach $248 for the company to cross a $6 trillion valuation, a threshold options pricing is tracking as the stock closes at a record for the first time since May.

The options pricing reflects a 13% delta for contracts expiring this week and about 50% for those expiring Oct. 30. The delta estimates measure how an option’s price responds to changes in the underlying stock; they do not measure the chance that shares will touch a given price before expiration. Contracts expiring Dec. 18 show a delta of about 67% at the threshold. Pricing also indicates roughly a one-in-16 delta for a $7 trillion valuation by Nov. 20.

Nvidia shares rose 1.3% Friday, ending seven weeks of sideways trading and closing at a record for the first time since May. Its market value finished just below $5.7 trillion. Nvidia accounts for 13% of the Nasdaq and 8% of the S&P 500.

Delta estimates do not indicate the direction of a future move: a move of the same size in the opposite direction is also possible. Some Nvidia call options have higher implied volatility than comparable puts, indicating a relative pricing bias toward hedging for a rally. That pricing does not establish that traders expect shares to rise.