In the beginning of June Nvidia (NVDA) announced a 4:1 stock split. The split will happen on July 19, after the close. On 6/8 I bought 1 option to expire on 11/19/21. I sold that option 9 days later for a $3000 profit.
2 days ago I bought another option with the Expiration Date of 10/15/21. I just sold that today for a $2500 profit.
6/21/21 – Buy to Open 1 NVDA 10/15/21 $720.00 C @ $65.00
6/23/21 – Cell to Close 1 NVDA 10/15/21 $720.00 C @ $90.00
Profit +$2500
I sold this option for a few reasons. 1, I like to take profits. 2, with the stock up the last few days I’m hoping for a little pullback so I can buy in again.
Another thought on my mind is I don’t like to buy options; when I do they’re normally LEAPS. I buy LEAPS because I like the extra time for protection. The option I sold today had an Expiration Date of 10/15/21. It still has 4 months before expiration but it’s still not enough protection for me. So, if I can take a $2500 profit in 2 days I’ll take it.
My near term plan for NVDA is to buy more options in the next week. I might hold these through the split or I might sell when I have a profit I like. They will have an Expiration Date of 10/15/21 or 11/19/21. The last time I’ll buy options will be 3 or 4 days before the split and I’ll hold these through the split. These will have an Expiration Date of Jan, 2022. These will be involved in the split. If I buy 1 I’ll end up with 4. I plan on being out within a week of the split. However, I’ll buy out to January in the case the stock pulls back before it goes up after the split. January will give me more protection. They will cost me more money but when buying options I like the time protection.
Something to always remember, when investing, especially when buying options, only invest the amount of money you can afford to lose.
Any questions on my splits strategy send me an email.
Successful trading,
Steve
The Options Coach