I have a 20/JUN/25 $250c I bought last year. I was planning on selling it a while ago and go to shares but I couldn't make up my mind due to the tax implication. Now I plan to sell it this year but I fear if I wait, there won't be any buyers or I'd have to exercise it. The current volume is only 1 every week or 2. I thought I might sell it before the split then buy back the equivalent after the split. Thoughts?
Should you sell your $NVDA options before the split then buy back for higher liquidity.
byu/ThomasTanksDown inoptions
Posted by ThomasTanksDown
2 Comments
First off congrats.
Second don’t sell it for liquidity if you want to buy it back. When the split happens you will get 10:1 for your option as well. The strike will adjust to 25 and you will just get 10 of them.
If you sell and buy back you are gonna pay about $10 pre split and probably $1 x 10 post split because only market makers are transacting. Also that’s per multiplier so you will pay $1000 for 1 contract and $1000 again.
Wait for the split then you will get your 25 strike options. You can sell those if you want or hold them to expiry.
Non-problem that I’d probably revisit a couple of weeks before every earnings event if I were fortunate enough to need to do so. A tax professional might able to tell you how to keep more of your NVDA profit when you do close. Very high quality problem. Not really seeing the split as a bad thing except for maybe the 99 extra commissions involved. 🫤