Another Bull Note for Suddenly Red-Hot Nvidia Stock

NVDA has gained 45% since its late-December bottom

Nvidia Corporation (NASDAQ:NVDA) stock is up 4% to trade at $180.79, afterPiper Jaffray initiated coverage on the chipmaker withan "overweight" rating and $200 price target. The analyst in coverage sees Nvidia trading at an attractive level thanks to its market positioning with data centers and automotives, as well as the recent Mellanox acquisition.

Nvidia stock has now added 45% since its intraday low of $124.46 on Dec. 26, and has turned in only three weekly losses in that time span. Today's surge has the shares on track for another test of the $185 level, home to their late-October lows and last week's highs.

Nvidia options traders have shown a distinct preference for calls lately. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the equity's 10-day call/put volume ratio of 2.61 ranks in the 97th annual percentile. The high percentile indicates a much healthier-than-usual appetite for long calls over puts of late.

Digging deeper, the weekly 3/29 172.50-strike call has seen the largest change in open interest during this time frame, with a skew toward buyer-driven activity. And the security's short-term contracts are attractively priced at the moment. Specifically, NVDA's Schaeffer's Volatility Index (SVI) of 41% ranks in the 22nd percentile of its annual range. In other words, near-term options are pricing in relatively low volatility expectations.