Best Covered Calls to Sell on MSFT and NVDA This Week for Weekly Income

The Short Answer: Which Strike to Target This Week

For most covered-call sellers on MSFT or NVDA this week, the sweet spot is a slightly out-of-the-money (OTM) call with a delta between 0.25 and 0.35, expiring in 5 to 7 calendar days. That range typically captures 1%–2% of the stock price in premium while leaving a small buffer before your shares get called away. If you want more income and are willing to give up upside, move closer to at-the-money (ATM); if you want more room to run, go further OTM.

The exact strike changes every Monday as prices move, so this article gives you the framework to pick the right one yourself — every single week.

Why MSFT and NVDA Are Popular for Weekly Covered Calls

Both Microsoft (MSFT) and NVIDIA (NVDA) have highly liquid weekly options markets. Tight bid-ask spreads mean you keep more of the premium you collect. High implied volatility (IV) — especially on NVDA — inflates option prices, which means bigger credits for sellers.

According to CBOE data, NVDA consistently ranks among the top five most actively traded single-stock options in the US market. MSFT is not far behind. That liquidity matters: when you go to close a position early or roll it out, you can do so without giving up a large chunk of your profit to the spread.

One caution: high IV is a double-edged sword. It signals that the market expects large price swings. NVDA in particular can move 4%–6% in a single session around earnings or macro news. More premium is the reward for accepting that risk — not a free lunch.

How to Pick the Right Strike: A Step-by-Step Framework

Step 1 — Know your goal. Are you trying to maximize income this week, or are you trying to hold the stock long-term and just clip a small coupon? If it is the latter, stay OTM with a delta under 0.30. If income is the priority and you are comfortable selling at current prices, go ATM.

Step 2 — Check implied volatility rank (IVR). IVR compares today's IV to the past 52 weeks. An IVR above 50 means options are expensive relative to recent history — a good time to sell. An IVR below 30 means premiums are thin; you may want to wait or widen your strike.

Step 3 — Look at the delta. Delta approximates the probability that the option expires in the money. A 0.30-delta call has roughly a 30% chance of being assigned. Most income-focused sellers stay in the 0.20–0.35 range for weeklies.

Step 4 — Calculate your annualized yield. Divide the premium by the stock price, then multiply by 52. This lets you compare different strikes and expirations on an apples-to-apples basis.

Step 5 — Check the earnings calendar. Never sell a short-dated covered call that straddles an earnings date unless you fully understand the risk. IV collapses after earnings, but the stock can gap far past your strike overnight.

Worked Example: Selling a Covered Call on NVDA This Week

Let's say it is Monday morning and NVDA is trading at $875 per share. You own 100 shares (one standard contract). Here is how the math works for two strike choices:

Option A — The 0.30-delta strike: The $900 call expiring Friday is bid at $9.20 and offered at $9.50. You sell one contract at $9.30 (midpoint). You collect $930 in gross premium (100 shares × $9.30). Your break-even on the downside is $875 − $9.30 = $865.70. If NVDA closes below $900 on Friday, you keep the full $930 and still own the shares. If NVDA closes above $900, your shares are called away at $900, giving you a total gain of $900 − $875 + $9.30 = $34.30 per share, or $3,430 on the position. Annualized yield on the premium alone: ($9.30 ÷ $875) × 52 = roughly 55% — but remember, you can only achieve that if IV stays this high every week, which it will not.

Option B — The 0.20-delta strike: The $920 call is bid at $4.80. You collect $480. Less income, but your shares are not called away unless NVDA jumps more than 5% in five days. Annualized yield: ($4.80 ÷ $875) × 52 = roughly 29%.

For MSFT, the math is similar but the dollar amounts are smaller because MSFT's IV is typically lower than NVDA's. With MSFT at $415, a 0.30-delta weekly call might be the $425 strike at around $2.80–$3.20. That is $300 in premium per contract, or about 0.7% of the stock price in one week.

Key takeaway: NVDA pays more premium per dollar of stock because it moves more. That is not a bonus — it is compensation for the extra risk you are taking.

Risks You Need to Understand Before You Sell

Covered calls are considered one of the more conservative options strategies. FINRA and the Options Industry Council (OIC) both classify them as a low-complexity strategy suitable for approved retail accounts. But low complexity does not mean low risk.

Risk 1 — Capped upside. If NVDA jumps from $875 to $950 after you sold the $900 call, you miss $50 per share of that gain. You sold that upside for $9.30. That trade-off can sting.

Risk 2 — You still own the stock. A covered call does not protect you from a big drop. If NVDA falls from $875 to $780, your $9.30 premium only offsets $9.30 of that $95 loss. The OIC's investor education materials make this point clearly: the premium provides only limited downside cushion.

Risk 3 — Early assignment. American-style options (which MSFT and NVDA options are) can be exercised by the buyer at any time before expiration. Early assignment is rare but more likely when the call is deep in the money or just before an ex-dividend date. The SEC's investor bulletin on options covers this scenario.

Risk 4 — Tax treatment. In the US, the IRS treats premiums from covered calls as short-term capital gains in most cases. If your call is assigned, the premium adjusts your cost basis or holding period depending on whether the call was qualified or unqualified under IRS rules (see IRS Publication 550). In Canada, the CRA treats covered-call premiums as either income or capital gains depending on your trading frequency and intent — Canadian readers should consult a tax professional familiar with CRA guidance.

Risk 5 — Liquidity gaps. Even liquid names like NVDA can have wide spreads in the first and last 15 minutes of the trading day. Always use limit orders, never market orders, when selling options.

How to Decide Between MSFT and NVDA for Your Covered Call This Week

The right choice depends on what you already own and what you are trying to accomplish.

If you own NVDA and want maximum weekly income, NVDA's higher IV makes it the better premium generator. A 0.30-delta weekly call on NVDA will typically yield two to three times more premium as a percentage of stock price than the equivalent MSFT call. The trade-off is that NVDA can move sharply, and your shares can be called away or your position can drop significantly in a single session.

If you own MSFT and prefer steadier, more predictable income, MSFT's lower IV means smaller premiums but also smaller swings. Many income-focused investors prefer this profile — they are not trying to maximize yield, they are trying to generate consistent monthly cash flow without drama.

A practical rule used by many experienced covered-call writers: if your IVR on NVDA is above 60, sell the call. If it drops below 30, skip the week or go ATM to compensate for the thin premium. For MSFT, the thresholds are similar but the absolute premium numbers will always be lower.

Do not sell covered calls on either stock the week before earnings unless you are prepared for the full range of outcomes. Check the earnings calendar on CBOE's website or your broker's platform before placing any trade.

Quick Checklist Before You Place the Trade

Use this checklist every week before selling a covered call on MSFT or NVDA:

1. Confirm you own at least 100 shares of the underlying stock. 2. Check the earnings date — do not sell a weekly that expires after the announcement. 3. Look up the current IVR. Aim for IVR above 40 for a reasonable premium. 4. Choose a strike with a delta between 0.20 and 0.35 for a balanced income-vs-upside trade-off. 5. Calculate your break-even: stock price minus premium collected. 6. Use a limit order at or near the midpoint of the bid-ask spread. 7. Decide in advance whether you will let the call expire, close it early if it reaches 50% profit, or roll it out if it goes in the money.

Having a plan before you enter the trade removes emotion from the decision and keeps your income strategy on track week after week.

What strike price should I sell for a covered call on NVDA this week?

Most income-focused sellers target a strike with a delta between 0.25 and 0.35, which puts it roughly 3%–6% above the current stock price for NVDA. For example, if NVDA is at $875, that might be the $900–$920 strike expiring Friday. Always check implied volatility rank before choosing — thin premiums may not justify the assignment risk.

How much premium can I realistically collect selling a weekly covered call on MSFT?

With MSFT around $415, a 0.30-delta weekly call typically generates $280–$350 in premium per contract, or roughly 0.65%–0.85% of the stock price. That translates to an annualized yield of around 34%–44% if replicated every week, though real-world results vary with IV. Lower IV weeks will produce thinner premiums.

Can I get assigned early on a covered call I sold on MSFT or NVDA?

Yes. MSFT and NVDA options are American-style, meaning the buyer can exercise at any time before expiration. Early assignment is uncommon but more likely when your call is deep in the money or just before an ex-dividend date. The Options Industry Council (OIC) recommends monitoring in-the-money positions closely as expiration approaches.

Is selling covered calls on NVDA too risky because the stock moves so much?

NVDA's high volatility means larger premiums but also a greater chance your shares get called away or that the stock drops past your break-even. The premium only offsets a small portion of a large downside move, as the OIC's investor education materials explain. Selling further OTM strikes reduces assignment risk but also reduces income.

How are covered call premiums taxed in the US and Canada?

In the US, the IRS generally treats covered-call premiums as short-term capital gains; if the call is assigned, the premium adjusts your proceeds or cost basis depending on whether the call was qualified or unqualified under IRS Publication 550. In Canada, the CRA may treat premiums as either income or capital gains based on your trading frequency and intent. Both US and Canadian investors should consult a qualified tax professional for their specific situation.

Should I sell a covered call on MSFT or NVDA the week of earnings?

Generally, no — not unless you fully understand the risk. Implied volatility spikes before earnings and collapses immediately after, and the stock can gap well past your strike overnight. CBOE data shows single-stock moves of 8%–12% or more on earnings day are not unusual for high-growth names like NVDA. Most experienced covered-call writers skip the earnings week or wait until after the announcement to sell.