Rolling Up and Forward 1 NVDA Covered Call for a Potential Gain of $141 in 2 Weeks
On May 9, 2025, I rolled up and forward 1 covered call on NVDA, a position originally opened in early March. The roll moved the expiry to May 23, 2025, and generated an additional $41 in options premium:
Trade Setup:
BTC 1 NVDA MAY 9 '25 107 Call Option @ $10.62
SLD 1 NVDA MAY 23 '25 108 Call Option @ $11.03
I closed the May 9 expiry deep-in-the-money covered call by buying it back at $10.62 and simultaneously sold a new call with a $108 strike and a two-week later expiry for $11.03. This generated a small net premium of $0.41 ($41 total). With NVDA trading above $116, the new position remains deep in the money, but if assigned at expiry, it promises a minimum return of $141.
What happens next:
NVDA is trading below our strike price of $108 at the expiry date (May 23, 2025) — in this case, the call option will expire worthless. We keep the full premium and continue the strategy by selling more covered calls to lower our cost basis and generate consistent income.
In case NVDA is trading above our strike price of $108, our 100 shares risk getting called away at $108. However, our plan is not to let this stock go yet. If our strike price gets challenged, we will attempt to roll up and out — ideally to a higher strike (e.g., $109–$110) with a later expiry, collecting a credit in the process.
One of our main goals is to reduce margin exposure as quickly as possible. That’s why I decided to stick with the same strike and simply collect premium instead.
We aim to hold NVDA for at least a year, both for long-term capital gains treatment and to continue benefiting from high option premiums in this volatile environment.
Break-even: $103.90
Our strategy is grounded in a long-term bullish view on AI-driven technology. NVDA sits at the center of this transformation — from powering LLM training clusters to enabling AI inference at scale across data centers and edge devices. We believe AI adoption is still in the early innings, and companies like NVDA stand to benefit for years to come.
Holding NVDA through the ups and downs allows us to collect premium while positioning for long-term appreciation, a core tenet of our Wheel Strategy approach