2 weeks ago, on 8/20, I bought 5 Nvidia (NVDA) Calls. The stock was at $168. I just sold these Calls.
The market is up big today on the announcement that U.S/China trade talks will resume in October. With the market up tech stocks are flying. With the market down on 8/20 and NVDA at $168 I bought 5 NVDA 1/17/20 $170 Calls. I paid a premium of $15.45. On the 5 contracts (500 shares) I paid a total of $7725. This Call still had a long way before expiration but I do like to lock in profit, and with the volatile market, I decided to jump out.
8/20/19 – Buy to Open 5 NVDA 1/17/20 $170.00 C @ $15.45 ($7725)
9/5/19 – Sell to Close 5 NVDA 1/17/20 $170.00 C @ $20.00 ($10,000)
Profit +$2275
With a $7725 investment and a $2275 profit my Rate of Return is 29.4%. This is a great return for a 2 week trade. This is the power of buying options! But you must remember buying options is very dangerous. 80% of all options bought, the trader loses his entire investment. This is a fact! I always preach if you want to learn to trade options you must start with selling. If you start with buying you will lose money. I guarantee it! However, I do feel Grasshoppers should buy some options to experience how powerful Time Decay is. Believe it or not, sometimes the best way to learn is to lose money. I think your best bet is to buy options with paper trading. This way you’re not losing real money. If you have any questions on the danger of buying options send me an email.
I really felt this was gonna be a low profit week. It turns out with yesterday’s AMAT trade and today’s NVDA trade I’m gonna have a great week. Right now I’m up over $4000 on closed trades this week. Next week is also shaping up to be a good week.
I’m still trying to get a Call sold on my 2000 shares of Snap I bought a couple of days ago. Today might be the day!
Steve
The Options Coach