Thread: NVIDIA Calls

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  1. #1
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    NVIDIA Calls

    I bought 100 shares at 169 then wrote a call with a strike price of 175 that expired on August 16, 2019. The stock jumped to 170 today so wrote another one that expires at 175 on September 20. I made about 942.00 dollars in premium and if it gets called I will make about 600.00 in gain. Here is the question. I guess if I take into account the premium my basis is around 160. If the stock falls below 160 do you write calls at or a bit over 160 or do you treat the premium separate and try to wait until you can write it above your purchase price? I know itís not a right or wrong question but curious how others do their call writing. This is in a tax deferred account.

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  3. Stocks/Investments Moderator boneil's Avatar
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    #2
    If holding NVDA is for trading purposes, short term, treat the premium seperate, take the gains and move on to the next trade. If holding Nvda is for longer term, then I would count the premium gained into cost basis, and continue to write calls against it, but pay attention to the Greeks. Learn how pricing changes as the stock moves. Learn when to get the most bang. If you think the stock will go down, then maybe take your profits and sell a cash secured put as another option.
    Knowledge is the Kryptonite of Liberalism

  4. Member
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    #3
    Quote Originally Posted by boneil View Post
    then maybe take your profits and sell a cash secured put as another option.
    It is weird but my broker said I could not do cash secured puts in my IRA account for some reason. I got it setup in two other accounts but he said there was some prohibition about using it in an IRA (maybe because if you don't have the cash you can't really move it in?)