I know calls have "unlimited" upside, but will this call not grow as fast?
I have a few NVDA calls expiring in Oct/Nov that had 20% gains today, but this January call only saw a 5% gain today – so it made me wonder if I'm missing out and i should take my gains now and rebuy again before the earnings call on Wednesday.
Am I limiting my upside here – NVDA250117C102 current at 98% gain – sell and rebuy or ride it out?
byu/altum inoptions
Posted by altum
9 Comments
You need to ask? Sell it and rebuy. You don’t stand there holding a 98% gain and watch it melt away to theta, and you sure as hell don’t hold that through an earnings call that could turn your 98% gain into a 100% loss. And speaking of earnings, I would wait until next Thursday to rebuy. If you buy anything before Wednesday, plan on selling it Wednesday.
I would not risk 98% profit through earnings, upside is very limited with all this hype in the stock
Literally sell and rebuy, my first six months of options were horrible from me trying to fight theta, if u want to also lose money like I previously did don’t fight it. In the current day I’m so scared of theta if I buy an option I sell it by a certain day even for a loss if I don’t get the move I’m looking for. Never buy options 8 DTE, 2 DTE, or 31 DTE unless ur playing news. It only makes it harder to break even when ur paying for invaluable time while time takes your value away.
Look at what the put is worth, that is your total theta on the call. Outside of that all you have is delta risk… there is some rho involved but that’s negligible… you can manage your deltas I a few ways, sell another call against it, sell some stock against it or just sell your position out and be happy with the winner
Any question that includes a phrase like “current at 98% gain” only has one answer. The second most common trading mistake in options trading is holding on to large gains until they turn into small gains instead of the larger gains you wanted.
I don’t trade options directionally most of the time. But if it were me I’d reduce the amount at risk by selling and establishing a cheaper position for earnings or I’d turn it into a spread. You could try to hedge coming into earnings with puts but this will be expensive and you’ll overpay for those puts
Sell. Roll. Something. Don’t be Dumb Money.
I have been in this situation a lot. The wise thing to do is just sell and then re-buy after.
That being said, this market is just coming out of a large down move and is looking fairly good at the moment, CAVA just had a hell of a day and lets see what some other earnings do as well. If stocks can move and stay up then sell 75% of your holdings. See if the 25% can pop, but if earnings are just a shit show of price action then ditch them all.
Roll them up and lock in the gains. Protect your gains. #2 rule behind managing the risk of the trade