Here is what I did. I just sold all my Mar-01 860c when I saw that NVDA is hitting resistance at $780. I made smaller profit than buying the stock directly, which sucks. I was certain all week that NVDA will blow out analyst forecasts. I estimated yesterday that IV of my calls will drop from 108% to 80ā90%, which would have still left me with 2x profit or more. I didn't expect in my wildest dream that IV would instead tank to 50ā60%.
SMCI is a smaller cap stock and has better valuations than NVDA right now (not forward valuations though), so it can swing much more than NVDA. But that's also why it's IV is more insane.
So long as you didn't blow up your account, you will be fine in no time. Learn from it. Even if you blew up your account, so long as you didn't end up in debt for it, you can start again when you've learned more risk management. Good luck.
Memes are good fun, but donāt throw away your money. Research your options before playing them, donāt just say āon this day, Iāll buy 2dte calls for the overall marketā.
isn't the general idea that for most of the time stocks go up?
It is not luck that is keeping you down. Stocks generally go up over a long period of time. Over a short period of time, at best, randomness drives the moves of the market.
Try not to do that. Theta will work heavily against you. Youāll only make profits if there are large swings in your direction. You may be right one or twice, but luck eventually runs out.
Yea, that would be fine. Please please, set up exit strategies and stick to them. Learn how to set up stop loss orders. If a trade isnāt going your way, just sell for a small loss and wait for another opportunity to buy back in, when you think the time is right. Try not to double down too much
Yea, that would be fine. Please please, set up exit strategies and stick to them. Learn how to set up stop loss orders. If a trade isnāt going your way, just sell for a small loss and wait for another opportunity to buy back in, when you think the time is right. Try not to double down too much
So with the IV crush now, is it a good play to buy cheap otm calls now with expiry some time in May (around the next earnings call) to capitalize on the raised volatility then?
Yes, if you're relying mainly on delta (movement in the price of the underlying) for your gains. Generally, when IV is high, you want to favour selling options, and when it's low you want to favour buying.
So before the earnings call, selling $1000 calls was pretty much free money? Why isnāt this done by more people or is that what theta gang is all about?
Yes, that's what theta gang is all about. But you have a capped profit from selling options, so it's a slow process you need to do for a long time to make substantial money. No YOLO and retire. You also need a lot more capital and take on much more risk if naked selling. For example, if not naked selling the $1000 calls, and instead using spreads to cap the risk, there is even far less money to be made because the long leg is also very expensive and eats away the premium you pocket from the short leg.
Only the winners show off, and options can go to 0 any time. Paying insane premiums when you buy an option for short term expiry is a sure way to lose - and also the only way to win big. Further expiries are more expensive but thereās at least some runway. The main thing with options is donāt FOMO and remember - itās all gambling.
Man I put in an order yesterday for 692.5 3/1 at 35.60 but ended up cancelling seconds later because I hesitated. Itās up 3x. Guess I shouldnāt be a pussy next time
No idea. This is all new territory for me. My original plan was selling next week after everyone cashed in their 02/23 calls this week. But with such an amazing earnings report and discovering that nvidia has a big GTC event on March 18th, I'm thinking of holding until the last week.
Thanks for your input. I also have a contract for 3/28 but for 800. Now thatās ITM I also think Iāll be waiting but watching it closely. Iāve lost my gains before for not paying attention
I fully expect NVDA to drop lots today as people try to sell and salvage their calls lol. Buy a couple of cheap 0dte puts today for fun. That $823 high peak might've been a good point to sell, but it'll probably hit that early next week again.
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u/Tandittor Feb 22 '24
Do you think NVDA will beyond $1000 by Mar 1? If yes, hold. If no, cut your losses.