As if the past few days of $1000+ losses weren’t bad enough for me, NVDA took a nose dive pre-market today and never recovered. It closed the shortened trading day down 30%. They took a major charge for a production glitch and piled it on by lowering quarterly sales forecast.
I am sitting on four August 17.50 naked puts which, in all likelihood, means I’ll own 400 shares on or before August options expiration. Not seeing a chance for a near-term rally in NVDA I sold naked calls to try to lesson my loss. As my experience with NVDA went last time around, I’ll be chasing this profit for a while before exiting. While NVDA was trading at 12.66 I sold four NVDA August 15 naked calls (UVAHC) and received $187.00 after commissions. If something amazing happens and NVDA climbs above 15 before August 15th I’ll take a loss of approximately $450 on it. If it doesn’t, I’ll continue to sell covered calls on my 400 shares and try to get back to a profit overall.
TDW has fallen $5 over the past two days moving my July 65 naked puts to a paper loss. Looking at the chart, 65 now looks like a harder point to get back to, especially after TDW used that range as a ceiling. I wanted to wait for a little rebound again before selling naked calls, but decided to cut my current paper losses some while I could. While TDW was trading at 59.26, I sold one August 65 naked call (TDWHM) and received $179.25 after commissions. If assigned the 100 shares from my naked puts my cost will be $61.22 for those shares. I still have a decent shot a profit within the next month and a half on TDW and will keep riding it out while I can.
July expiration can’t get here soon enough for me. I have a bunch of options that are moving to a paper loss that I don’t want to sell calls on yet because they are so volatile the upside risk could take me out in a rally. I waited longer than I should have on Alcoa this week and want to avoid the same mistake again if possible. I’m watching FCX, DRYS and JOYG closely still. All have good premiums right now, so I think I’ll be able to sell covered calls when assigned the stocks and work out a profit on each.