Sold a Nvidia Call

Back on 9/1/20 I bought 1000 shares of Nvidia (NVDA) at $553.85. I am well aware NVDA is a very expensive stock! My account being up much higher than the beginning of the year allows me to get involved in stocks like this trading with 10 contracts. You must remember I also work on margin.

I’ve been selling Calls against these shares since I bought them. Last week being the largest premium I ever brought in with NVDA, $10,000.

I just sold another 1 week Call. I sold a NVDA 10 contract Call expiring this coming Friday. It has a Strike Price of $560 and I received another $10 premium for another $10,000.

Sell to Open 10 NVDA 10/23/20 $560.00 C @ $10.00 (+$10,000)

This is a Covered Call on previously owned stock which would always get a Risk Factor 1, however, I’m a little worried about this week for a number of reasons. You know I’m concerned with the election coming in about 2 weeks. Another concern is 80 of the S&P 500 are reporting earnings this week. But, my main concern is the stimulus package. Pelosi put a 48 hour deadline for a deal. This deal became so political that I feel both sides will stay stubborn and we won’t have a deal before Nov 3rd. We must remember the politicians are not for the people! They are for the Whitehouse!

All this being said, there are a number of reasons that can move the market down this week. I am moving my normal Risk Factor 1 to a Risk Factor 3. When you’re in a $500 stock, and things don’t go well, it can easily take a $50 drop. This scenario is where the risk lies. Let’s hope NVDA hangs in there.

Successful trading,

Steve

The Options Coach