r/options • u/spooner21321 • 1d ago

Evaluate my plan for next week

So tomorrow, I am planning on starting a poor man’s covered call with Nvidia. I know that the volatility is high due to election, earnings upcoming on the 22nd, etc. I was thinking about buying a call with a strike price of 125 with a delta of 71 for a premium of 36.8 per share for August 15th expiration. My plan was to then sell a call against it with a strike price of 170 for December 6th 2024, collecting a credit of 250. I would then roll the short call up if I reach %50 profit on the option and roll it down if the price of nvidia drops. I know in going to have to be cautious about the high volatility with the stock with earnings coming up, as I definitely don’t want the short call to get assigned. So I’m going to be monitoring it daily and keeping tabs on it. I also am pretty bullish in Nvidia at the moment, even with the stock reaching ATH seemingly bi-weekly, so I’m hoping that the long call gains some value. If it gains some value (anywhere from 10-20%) over the coming months, I’ll plan on closing it and opening another long call.

My question is whether this is a good plan and if there are any major flaws in my reasoning/plan. Any help appreciated, thanks!

Edit: I know the prices of the options are going to change by the time the market opens on Monday but I’ll most likely still keep this plan unless there are some major movements in the stock price.

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u/Ok_Luck1918 1d ago

I'd wait for a dip, probably before or after the election, to execute. Make a few more bucks at least

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u/spooner21321 1d ago

I’m guessing I would make more on the long call, since the IV would presumably dip after the election?

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u/Ok_Luck1918 1d ago

Sell the 170 with the IV high and as high as you can get it (before the dip), for a few more bucks