Hi guys, I was blindly bought a weekly NVDA call using profit I made this month just for some dopamine entertaining. However I can't figure out what my call will looks like tomorrow's morning. I heard that it will be crush, how hard will it crush, anyone care to give me a few example outcomes? I use simulate my return on robinhood, but it doesn't account for IV crush. My option expire this Friday, bought strike $1,000 for $17.40 when the IV at close was 141.72%. Delta 0.32; theta -9.25; Vega 0.243. TIA!
Posted by VincentStl
5 Comments
If it opens at 1007 (current AH pricing) and crushes to 50 (crush expectation for tomorrow’s ATM weekly call) it’ll be worth almost exactly what you paid for it.
If the AH price of the stock is the same as the opening price at 9:30 the contract will be worth roughly $21-22.
What do you think May 24th 1110c will be worth? Got them for $3.05
Sorry 1100c. Still cooked?
OPTS prices are not published before the market open, but the savvier brokers may display an “estimated” PnL at 9 AM.
Take all of this with a grain of salt.
Beware of the two forces you must fight:
1. The volatility price spike right at the open when stocks gap up, and boy this one is already there.
Or
2. you hold on and hope NVDA runs and keeps running.
Generally (and I mean that) the prices on ATM (at the money) options contacts will pop right at the open and start to decay immediately, and quickly at that. They are run by machines, but I suspect there will be some premium baked in there because you’re at the money, or better – in the money.
Do you take the profit right at the open or hope for at least a 17.20 point move to 1017? It’s almost there, and any cash open above 1000 will juice the contract price. You have a little bit of theta left in there but it ain’t gonna be much as the day rolls on. If NVDA starts running you’ll see your price start to run also. Also, high volatility increases options prices, and NVDA is about as vol as they come.
It could easily get there, or more, or not. You’ll find out tomorrow. Usually as strikes get ITM, they stop decaying so you’ve got that going for you.
Good luck to you.