(Bloomberg) -- Hedging against big swings in Nvidia Corp.’s share price with options is expensive, but derivatives traders are being tempted to sell contracts to earn some extra yield as the stock corrects its massive rally.

For investors that expect further stock gains to be capped for the moment, call options are offering attractive yields, some market watchers say. With implied volatility for the artificial intelligence darling hovering near its year-to-date highs, options bets that the gains in the chipmaker’s stock will be capped below 10% before the company reports first quarter earnings on May 22 are selling for a 2% premium.

“It can make a ton of sense to sell short-dated calls if you are long the stock,” said Michael Purves, founder and chief executive officer of Tallbacken Capital. “The implied volatility is high going into earnings, and there does seem to be a sense that some buyer exhaustion is occurring.”

Nvidia shares have fallen more than 20% from an intraday all-time high in March after soaring roughly ninefold over the past 18 months. And while the stock seems to be rebounding from its recent breather, price movements regarding AI stocks remain unpredictable. 

Hence selling call contracts without also owning the stock “seems very risky,” says Purves.

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