To execute a strategy to sell NVDA stock effectively when it's currently trading at $140.35, the approach you've outlined — selling a covered call (CC) at 150 and layering a butterfly spread up to 165 — is a smart way to manage potential upside while generating premium. Here’s a breakdown of this strategy and some best practices to consider:
Strategy Overview 1. Sell Covered Call (CC) at $150
What it means: You own the NVDA shares, and you sell a call option at $150 strike price (e.g., for 1-2 weeks out).
Goal: Earn premium while capping your upside at $150.
Benefit: Collect income if NVDA stays below $150.
Risk: If NVDA spikes above $150, you may be forced to sell your shares at that strike, capping your gain.
2. Buy Butterfly Spread (150/157.5/165)
Structure:
Buy 1 call at $150 (to close your short CC leg if needed),
Sell 2 calls at $157.5,
Buy 1 call at $165.
Goal: Profit from a sharp rally without buying more stock.
Butterfly payoff: Peaks at $157.5 but provides some exposure if NVDA flies up to $165.
Why This Combo Works
Downside protected: You hold NVDA shares.
Flat to moderate upside: Covered call pays you a steady income.
Sharp rally hedge: Butterfly lets you benefit if NVDA pops past $150.
Example Scenario
NVDA at $140.35 Target expiration: 2 weeks out
Sell 1x $150 CC for ~$1.50 (depending on IV & expiry)
Buy butterfly:
Buy 1x $150 call (~$1.50)
Sell 2x $157.5 calls (~$0.80 each)
Buy 1x $165 call (~$0.25)
Net cost of butterfly: ~$0.15–$0.25 Total premium collected: CC ($1.50) – Butterfly ($0.25) ≈ $1.25 net income
To execute a strategy to sell NVDA stock effectively when it's currently trading at $140.35, the approach you've outlined — selling a covered call (CC) at 150 and layering a butterfly spread up to 165 — is a smart way to manage potential upside while generating premium. Here’s a breakdown of this strategy and some best practices to consider:
Strategy Overview 1. Sell Covered Call (CC) at $150What it means: You own the NVDA shares, and you sell a call option at $150 strike price (e.g., for 1-2 weeks out).
Goal: Earn premium while capping your upside at $150.
Benefit: Collect income if NVDA stays below $150.
Risk: If NVDA spikes above $150, you may be forced to sell your shares at that strike, capping your gain.
2. Buy Butterfly Spread (150/157.5/165)Structure:
Buy 1 call at $150 (to close your short CC leg if needed),
Sell 2 calls at $157.5,
Buy 1 call at $165.
Goal: Profit from a sharp rally without buying more stock.
Butterfly payoff: Peaks at $157.5 but provides some exposure if NVDA flies up to $165.
Why This Combo WorksDownside protected: You hold NVDA shares.
Flat to moderate upside: Covered call pays you a steady income.
Sharp rally hedge: Butterfly lets you benefit if NVDA pops past $150.
Example ScenarioNVDA at $140.35
Target expiration: 2 weeks out
Sell 1x $150 CC for ~$1.50 (depending on IV & expiry)
Buy butterfly:
Buy 1x $150 call (~$1.50)
Sell 2x $157.5 calls (~$0.80 each)
Buy 1x $165 call (~$0.25)
Net cost of butterfly: ~$0.15–$0.25
Key ConsiderationsTotal premium collected: CC ($1.50) – Butterfly ($0.25) ≈ $1.25 net income
Timing: Shorter-dated options (1-2 weeks) maximize theta decay.
IV (Implied Volatility): Higher IV boosts premiums but also increases risk.
Adjustment: If NVDA hits $150, roll the CC up and out to higher strikes.
Exiting: Close the butterfly if NVDA runs past $160 to lock in gains.
SummaryThis hybrid strategy:
Monetizes a flat or gently rising market (via CC),
Adds a low-cost bullish lottery ticket (butterfly),
And is ideal when you believe NVDA has room to spike — but not certainty.
For writing CC at $150 (premium $4.50):
f NVDA stays below $150: You keep the premium, and your shares.
If NVDA rises above $150: Your shares are called away at $150, and you keep the premium. Your total gain = ($150 − $142) × 100 + $450 = $1250.
If NVDA goes to $160+: Your upside is capped at $150 + premium = $154.50 effective sale price. You miss gains above that.
下面是蝴蝶部分的分析（AI 提供）
To avoid the open-ended risk above $165, consider:
1× Buy @ $150
2× Sell @ $160
1× Buy @ $170
This forms a balanced butterfly or a broken wing with no naked short leg.
What if the price jump directly to 170 after it gradually climbs to 155 and you have not closed the bufferfly spread?
如果CC无价值过期，是不用考虑BF的。
只有当CC变成ITM了，并且离过期至少还有几周时间，我才会考虑用BF来补救。 如果离过期没剩多少时间，或者ITM得不多，则会选择简单roll CC到下个周期。
对我来说，一个简单的原则是： 买入内在价值，卖出时间价值。 所以我的操作经常会involve买入itm的option, 卖出atm or slightly otm的option。
事实上这种操作如果光看option部分，盈利其实不会很大。不过由于我是结合正股做，我相当是用这种方法来代替买put保险。 卖CC + butterfly补救可以让我把CC的strike经常维持在ATM附近，至少不至于deep ITM，从而保护正股不被call走，让正股参与完整个上涨行情。
Even if stock continue to extend its 5th wave, you can use butterfly to compensate the written cc
不过鉴于美股牛长熊短，一直保留正股不失为一种稳妥的做法，相信总会涨回来。:)