First, the sauce:
-
Bet $29,000 on NVDA calls because I was so sure they would beat earnings, and so sure that beating earnings would cause a boost.
-
Those calls are now worth about $4,000 today.
-
Net loss: -$25,000
-
I feel absolutely terrible and I deserve to be insulted for it, yes. I just really thought I'd catch a break.
My question:
- Expecting that there was something I might not be seeing (turns out, I learned a new principle today called IV crush), I bought with a 9/6 expiry. I basically have two choices: salvage the $4,000 or call it all a loss and hope it recovers next week.
My request:
- Bring on the hate. I get it. But if you're going to REALLY rip me a new one, please also leave your advice.
This was an expensive lesson that I won't need to learn twice. I'm sure nobody has sympathy for the call buyers today, nor should they, but I'm not sure what to do from here. I kind of figured it would either be a gain from earnings beat, or loss from earnings miss. I'm not sure what to do about an earnings beat where I have an entire extra week to see what happens after the 8/30's expire worthless.
NVDA Call-Buying Loser Ready for the Hate, But Need Advice
byu/vls_official inoptions
Posted by vls_official
49 Comments
You bought 30K of options without understanding the premium you were paying and how IV is inflated around earnings? Dude.
Just eat the loss and learn from it.
Probably just sell today depending how far OTM you bought.
next time try SELLING options
Well now you have two choices.
Sell:
Salvage 4k.
Upside: 4k
Cost: 0
Hold:
Wait and hope for an increase in nvda price before 9/6. If doesn’t happen 0 at expiration. Before value of the 4k will quickly decrease towards expiry unless nvda starts rising hard.
Upside: infinite
Cost: 4k
If you sell you’ll be really pissed of if nvda rises. If you hold and it doesn’t rise you’ll be pissed you didn’t sell today.
Welcome to trading
Could be a good idea to hold
You expire next week
Market makers are basically fucking all the calls and puts today by holding it level
It should rise next week to 125-129
Not stock advice
Just my opinion
What is your strike price and delta that you bought in? If it’s atm then you may have a chance recover a bit by next week. We should see green tomorrow
Sell your positions, NOW. Don’t ever touch options again unless you understand the greeks.
also, don’t bet it all/this much on one stock. a shit ton can happen with 1 stock. you can get absolutely bu-lasted on one stock like this.
Depends, is that your last 4000? You should probably cash in though, you didn’t even post the strike…
Sounds like you can’t really afford to lose the whole 30k…pray for another morning pop tomorrow and sell.
Weeks ago I bought 20k of 9/20 136 calls hoping to catch some gains on a run up to earnings but the opposite happened 😂
I have a bit more time so I’m gonna hold a week and see if I can sell for a bit more than the 2200 they’re worth now
Stop betting revenue, it’s been weeks we knew they would increase, bet on guidance.
You do have some time left. However, the time decay and IV might not let you recover. Highly depends on the strike. If you think it will be in the money at expiration you can probably recoup 50%.
You should just sell. Take the lesson. Do the hard thing. That’s how you learn not to do stupid, like take a position on earnings.
You are already down big, what’s another 4k? Just hold and hope for a miracle
u literally gambled, think about selling put options of good companies u wouldnt mind own at the certain strike price next time + dont play earning with money u can’t afford to lose for a starter
If it makes you feel any better I know about IV crush and still got burned. Even with a small move I’d be in the money and in profit despite IV crush but I didn’t expect it to tank. Or rather I expected that this could happen and still went for it anyways.
In any case your expiration is probably not gonna make it, sorry to say, and if you can’t afford any more losses just sell it now. But it might be worth to stick around till next week in case you can at least get out with a bit more money if it starts rebounding.
You should be thankful. Incurring a huge loss is the only way to truly learn options I’m afraid. I’ve lost more than half my portfolio before trading options. Now I just take a short position.
Options are pretty much just gambling
As for your topic, I suggest you just take the loss. At least you will have peace of mind from then on instesd of constantly checking your broker app everyday every hour hoping for a rare upside. NVDA will also need break immensely high for you to recoup not just IV BUT also theta decay.
So yeah, very unlikely to happen bro.
No hate from me, Pal.
Like most people, you took a shot and missed. It happens to even the best of traders, so cheer up.
At current price with the iv crush it would be extremely hard to recover . I tried averaging down so let’s see .
Sell 60% or more. Maybe there’s a miracle and the remaining $1k or so you don’t sell turns into more than $1k.
Pull the 4k out and buy intel 💀
In for a penny, in for a pound. Leave it in and see if you could recover more, assuming you followed rule #1 – only invest what you are willing to lose.
There were many articles and tv commentary leading up to this particular earnings report talking about how the stock was already priced to perfection and would likely fall even if they beat, which is why I stayed away. Do more research before you enter a trade like that, don’t be a victim of euphoria!
Earnings are pure gambling. Better off buying 3 month expiry options ATM or ITM or just the underlying asset.
IV crush. Understand that assuming nothing changes, options will tank in price after earnings. This happens because before earnings the bulk of the premium is from high implied volatility, that disappears after earnings along with all the inflated premiums.
Also, with tech stocks, beating earnings does not mean the share goes up. There’s about 10 years of growth already factored into a tech stock price, so often times they’ll beat estimates… but beating the estimates is already part of the price. Most of the times, they don’t beat it by enough and the stock tumbles. If you want to play earnings, you should have sold cash secured puts or covered calls
Strike?
You had enough cash to buy 200 shares in which to sell calls against and/or wheel. That would have been a much safer, more profitable, long term play in my opinion. You simply gambled by putting it all on black.
What’s the strike price ? I see OP bought $29k of calls expiry 9/6.
Well deserved. You ignored the risk.
You’ll be fine the terror will be only here till prob Tuesday at latest next week
I can only imagine how much you were sweating after hours yesterday 😢
Go on [optionsstrat.com](http://optionsstrat.com) or [optionsprofitcalculator.com](http://optionsprofitcalculator.com) and check what your calls would be worth on various dates at both your upper end and lower end expectations for NVDA share price. If they are far out of the money, it’s probably better to sell sooner vs later.
Bro, you made a huge bet on earnings and didn’t know what IV crush was? Sell your position and go learn about options before trying again. And try with small positions (1 contract, couple hundred bucks max) until you understand what you’re doing.
It’s absolutely crazy that people just throw this kind of money around without knowing what they’re doing. You’re basically picking a random horse and hoping it wins…
I have bad news for you….
It’s a lesson you will learn again, when you least expect it and when you are convinced you had taken it into account.
In my opinion it will recover significantly next week. You may not recover fully (you will not) but you will get back a bigger piece of money. This is exactly the reason I bought calls and puts for 9/6. Today I made a win selling the puts, next week I hope the same by selling the calls (both were ATM)
No hate dude. You took your shot and failed. Learn from it and move on.
Earnings IV killed you here and is why I rarely trade it with options. Probably should’ve done a bull spread.
I’d exit the position if I were you. Options are a huge risk near periods of high vol. You could’ve even lost tons of money ATM since stock price barely moved. I bet a lot of people did
If you take the loss now, NVDA will run higher, if you don’t take the loss, you will lose it all. You are basically God now till expiry.
Bro chill out. Not that big a deal. If it had increased 6% at open, you learn a completely different lesson.
The beauty about buying options is the convex nature of profit (and loss). A week is a long time in NVDA land. Selling now for $4k makes little sense.
I’m sure you knew losing the full $30k was possible. But you didn’t buy 8/30 expiration for a reason.
A few % points in your favor will change that $4k amount. A few more than that and you’re back to 5 figures. The IV isn’t that high on 9/6 expiration.
Just hold and wait for a move in your favor. Shit doesn’t go straight down; see SMCI
No Hate brother i went in with 50k exp 9/20 125C and i am at -25k today…you took a shot (we all did) and missed….my humble advice if ypu can afford loosing 4k wait till next Tuesday before pulling a move…ypu might loose it all or maybe reciver a bit more….
ADVICE:
Before placing *another* trade, work through many of the excellent resources linked on the top left of the page, watch some of the “Mike & his Whiteboard” videos, follow this sub for a while (& read how other people blew up their accounts, too), and get comfortable paper trading before committing real capital again.
>I’m not sure what to do
Take your $4000, put it in a mutual fund, and stop trading options.
Welcome to the casino that is options. How much of your net worth was the $29k?
I once had a friend who was a beginner in options and he put $3k into AAPL options just before earnings. After earnings, AAPL went down a few percent (just like NVDA today), and his position went from $3k to $400. He felt foolish, but said he’s already lost so much he might as well hold his remaining options just in case. His $400 then turned into $0. Moral of the story is accept that you lost and pull out the few thousand you still have. Also, you should probably never trade options around earnings again, take this as a lesson.
Here’s hopefully a helpful perspective. First, this was likely way out of your comfort zone as far as position sizing. But if it wasn’t then you could look at the percentage loss on the position. You’re looking at a nearly 90% loss. If it were me and 29k was 5% of my account, I’d hold. Once you’re down that much you’re most likely doomed but there’s always a very tiny chance that you could recover some or all of your losses. It happens, look at Starbucks a few weeks ago. It shot up 30% in a day! If it were a 50% loss I’d say sell now and limit the loss but at 90% you’re screwed and all you have is hope.
Of course, if this is all your money and you really need that 4k then I guess you sell now and keep what you can.
Your down 25k, might as well risk it all and see what you can recover.
Hold it till expiry.
As they say, education is expensive. You’ll recover.
I have been there. I sold 4x naked calls on GME and got margin calls on a 100K account. If there is a next time then use strikes farther out in the future. You won’t be able to buy as many contracts but when IV drops at least your contracts would only drop by something like 50% and not 96%. I would try and get out if I were you and salvage some capital.