Today, I'm excited to share a recent win from my options trading playbook. Buckle up as we dive into a day trade that turned out to be quite the rollercoaster ride!
The Setup
On January 24, 2025, I had my eyes set on NVIDIA (NVDA), a stock that's been making waves in the tech world. With AI advancements and chip demand soaring, NVDA has been a hot ticket. I decided to play this momentum with a deep in-the-money call option.Here's the nitty-gritty:- Option: NVDA $200 Call
- Expiration: January 16, 2026
- Contracts: 1
The Play
9:57 AM ET: Sold 1 contract at $1,438.002:10 PM ET: Bought back 1 contract at $1,240.00
The Result
Profit: $198.00Return on Investment: 15.97%That's right, folks! A cool 15.97% return in just over 4 hours. Not too shabby for a day's work, eh?
Breaking It Down
Now, you might be wondering, "How did you pull this off?" Well, let me spill the beans:- Market Timing: I sold the option early in the trading day when optimism was high.
- Patience: Instead of panicking, I waited for the right moment to buy back.
- Deep In-The-Money: These options are less volatile, providing some cushion.
The Takeaways
While this trade worked out well, it's crucial to remember a few things:- High Stakes: We're talking about options priced over $1,200 each. That's not chump change!
- Risk Management: Always have an exit strategy. I was prepared for the trade to go south.
- Market Knowledge: Understanding NVIDIA's position in the tech landscape was key.
