I shared in a previous post that I had a huge position in Nvidia other than shares, SELL PUT & SELL CALL contracts and they are my BULL CALL Spread contracts that I have invested USD26k of my capital.
More details here: My USD26k Bet On Nvidia
On 11 Oct 24 & 15 Oct 24, I closed those positions for a good profit of USD10.47k. In this post, I will take you through to how I achieved and persisted when things did not go according to plan.
How It Started?
On 14 June 24, I started building up my BULL CALL Spread positions when Nvidia was trading around USD130+. I chose the USD110/108 strike prices to give myself a safety margin, just in case Nvidia drops below USD130.
The expiration date was set at Nov 24 as it was a seasonally bullish month and the US election would have concluded by then (more certainty which the market loves when the US president is decided by then). The chosen strike prices mean that I will get max profit if Nvidia closes above USD110 on expiration date or max loss if Nvidia closes below USD108.
However, things did not always go according plan as Nvidia started to correct going into July and corrected further in Aug, when the contract turned from ITM to OTM, which means I will lose all my capital if Nvidia drops below USD108 by expiration date.
As Nvidia’s share price started to dip, I add on more contracts at the following share prices that Nvidia was trading at:
131.76, 135.8, 126.8, 124.31, 124.8, 127.39, 111, 104.56, 110, 117.63, 121.72
I eventually accumulated 200 positions of BCS 108/110 expiration 15 Nov 24, with an average price of USD132 per contract. On 11 Oct, I closed all 200 positions for a profit of USD9.64k.
More details: [11 Oct 24] +USD9.64k Profits, Closed My Nvidia BULL CALL Spreads
On 26 August 24, I also started another Nvidia BCS position with more conservative strike prices of USD99/97. I added more positions when Nvidia was trading at the following strike prices:
126.3, 121, 122.86, 133.04
I eventually accumulated 60 positions with an average price of USD168 per contract.
On 15 Oct 24, I closed them all for a profit of USD830.
[15 Oct 24] +USD830 Profits, Sold Nvidia BCS Positions
I share all my trades on the same that I made them on my Patreron page, you can follow me there for real-time updates and references.
Concluding Thoughts
The Bull CALL Spread strategy gives a good win-rate because options buyer can profit when share price is increasing, stays stagnant or has a slight dip. I prefer to use it over Selling Cash Secured PUT because it is less capital intensive as well as over buying CALL options because time decay will eat away the premium even if the share price rises eventually.
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