To The Moon

🚀 NVIDIA was trading around $219–$220, and I decided to do two things at the same time: I bought a small amount of NVIDIA shares around $218.86, while also selling a cash-secured put with a $205 strike price, collecting a $10.20 premium. For me, these two trades are connected. I am not simply chasing NVIDIA because the stock is famous or because everyone is talking about AI. I am trying to build a price ladder where I can participate if NVIDIA goes higher, while also getting paid if the stock comes down.

🐶 My Options Puppy approach is simple: I want to own NVIDIA, but I don’t necessarily want to buy all my shares at today’s market price. If NVIDIA falls significantly, I would rather have a predetermined price where I am comfortable buying more. The $205 put gives me that opportunity. At the same time, the premium gives me compensation for waiting.

💰 First, let’s look at the actual trade. I sold 1 NVIDIA put contract, with a $205 strike price, expiring November 20, 2026, for a premium of $10.20. Since one options contract represents 100 shares, the premium received is approximately $1,020 before fees and commissions.

🧮 The important number isn’t really $205 — it is my effective purchase price. If I am assigned, I would technically buy 100 NVIDIA shares at $205 per share. But because I already received $10.20 per share in premium, my effective cost would be:

$205 − $10.20 = $194.80 per share

🎯 That $194.80 is the number I really care about. If NVIDIA eventually falls below $205 and I am assigned, I am not buying NVIDIA at $205 in economic terms. After accounting for the premium collected, my effective entry price is around $194.80, before transaction costs.

🐕 This is exactly why I like cash-secured puts when used on a company I genuinely want to own. I am effectively telling the market: “I am willing to buy NVIDIA at a lower price, but if you don’t give me that opportunity, I still want to get paid for making the commitment.”

📊 Why $205? Looking at my chart, NVIDIA has been extremely volatile. The stock reached around $236.54 earlier in the period shown, then experienced several significant pullbacks. More recently, NVIDIA moved back toward the $220 area after another period of volatility. This tells me that buying at the absolute top isn’t necessarily the strategy I want.

⚠️ The chart is also showing a warning: NVIDIA is currently around $219.68 in the screenshot, while the short-term VMA readings include approximately $223.25, $219.62, $210.15, $210.40 and $198.72. The stock has momentum, but it is not moving in a straight line. I therefore don’t want my entire strategy to depend on NVIDIA continuing higher immediately.

🛡️ This is where the $205 put becomes interesting. My strike is already below the current price. From approximately $219.68 to $205 is a decline of about 6.7%. That gives NVIDIA some room to move down before the strike becomes threatened.

💡 And after including the $10.20 premium, my effective price is another $10.20 lower. From $219.68 down to $194.80 is roughly a 11.3% decline. So my strategy isn’t based on NVIDIA never falling. In fact, I am deliberately preparing for a pullback.

🐶 Options Puppy lesson #1: Don’t confuse a premium with free money. The $1,020 premium looks attractive, but I am accepting an obligation. If NVIDIA falls sharply below $205 at expiration, I can be assigned 100 shares. That means I need to have enough cash available to purchase those shares.

💵 The cash requirement is important. A $205 put represents a potential obligation of $20,500 for 100 shares. I therefore need to treat the $20,500 as committed capital rather than pretending that the $1,020 premium is simply a guaranteed profit.

📈 But if NVIDIA stays above $205 at expiration, the situation is different. If the put expires worthless, I keep the premium. NVIDIA could be at $210, $220, $230 or even higher, and I would not be required to buy the shares through that put.

🎯 That creates two possible outcomes that I am comfortable with.

🚀 Scenario 1: NVIDIA stays above $205. The put can expire worthless, and I keep the approximately $1,020 premium. I don’t get the 100 shares, but I have been paid for taking the obligation.

🐕 Scenario 2: NVIDIA falls below $205. I may be assigned 100 shares at $205. But because I collected $10.20, my effective cost is around $194.80. If my original investment thesis remains intact, I would then own NVIDIA at a much lower effective price than the approximately $219 level where the stock was trading when I entered the strategy.

📉 Scenario 3: NVIDIA crashes dramatically. This is the scenario that people sometimes forget about. If NVIDIA falls to $170, $150 or lower, the $194.80 effective entry price does not magically protect me from losses. I would still have a losing position if the stock falls far enough. The premium provides a cushion, not complete protection.

🧠 That is why I don’t sell puts simply because the premium looks attractive. I need to be comfortable owning the underlying company. If I would panic the moment I received 100 shares, I probably shouldn’t be selling the put in the first place.

💻 For me, NVIDIA is a company where I am comfortable considering ownership because of its position in the AI infrastructure ecosystem. But being bullish on NVIDIA doesn’t mean I believe the stock must rise every single day. A strong company can still experience 5%, 10% or even larger corrections.

📉 The recent chart actually reinforces this point. NVIDIA has repeatedly moved higher, pulled back, consolidated, and then attempted another breakout. That type of price action creates opportunities for investors who are willing to think in terms of price levels rather than trying to predict every single daily candle.

🪜 My strategy is therefore more like building a ladder. I bought a small fractional position around $218.86 because I wanted some exposure to NVIDIA immediately. At the same time, I sold the $205 put because I wanted another opportunity to accumulate shares at a lower effective price.

💡 Why buy shares at $218.86 if I am willing to buy at $194.80? Because I don’t know where NVIDIA will be tomorrow. If I wait for $194.80 and NVIDIA runs to $250, I may never get the shares. Buying a small amount now gives me participation while keeping the larger potential commitment lower.

🐶 This is one of the biggest lessons I have learned from options: I don’t always need to make one giant decision. I can split my decision into smaller pieces.

📊 For example, instead of saying, “I want to buy 100 NVIDIA shares today,” I can say: “I will buy a small amount now, and I will be willing to buy 100 more shares at a lower effective price if the market gives me that opportunity.”

💰 The $10.20 premium also gives me a meaningful cushion. The difference between the $205 strike and my effective $194.80 cost is $10.20 per share, or approximately $1,020 for the contract.

📈 On the $20,500 cash obligation, that is about 4.98% return on the secured cash for the option period, before fees and taxes. Because the contract expires on November 20, 2026 and the trade was entered on August 18, this is actually closer to roughly three months rather than two months. I don’t want to annualize that return and pretend it is guaranteed; the actual result depends on how the option behaves, whether I close it early, whether I am assigned, and what happens to NVIDIA.

🐕 Options Puppy lesson #2: Time matters. A $10.20 premium can look amazing until we consider how much capital is required, how long the money is committed, and what risk we are taking. I always want to look at the premium relative to the cash obligation.

🔥 Another reason I like having a lower strike is psychological. If NVIDIA drops from $219 to $210, I don’t automatically need to panic. My put is still above its strike. If NVIDIA drops to $205, I know exactly what I signed up for. I was willing to buy shares at that level.

🧘 That changes my mindset. Instead of thinking, “NVIDIA is crashing, what should I do?” I can think, “This is the price level I selected when I entered the trade. Has my investment thesis changed?”

📌 Of course, I still need to monitor the company. A falling stock price isn’t always a buying opportunity. If NVIDIA’s fundamentals materially deteriorate, if the AI investment cycle changes, or if something fundamentally important happens to the business, I shouldn’t blindly accept assignment simply because I originally liked the company.

🐶 Options Puppy lesson #3: A cash-secured put is not a way to avoid risk. It is a way to define the price at which I am willing to accept a particular risk.

💵 I also like the fact that the premium is received upfront. But I remind myself that receiving $1,020 doesn’t mean I have generated $1,020 of risk-free profit. The premium is compensation for taking the downside obligation.

📈 If NVIDIA rallies strongly, I may never own those additional 100 shares. Some people view that as a failure. I don’t. If NVIDIA rallies while my put expires worthless, I still received the premium. Meanwhile, the fractional shares I bought participate in the upside.

🚀 If NVIDIA falls moderately, the put becomes more valuable to me as a potential entry mechanism. I could potentially end up owning shares at the $205 strike with the premium lowering my effective cost to around $194.80.

⚠️ If NVIDIA collapses, however, I must be prepared for the downside. This is why cash-secured puts are fundamentally different from simply collecting money. The $20,500 potential assignment obligation is real.

📚 For beginners, I think this is the most important takeaway: Don’t sell a put just because someone tells you the premium is attractive. Ask yourself three questions:

1️⃣ Would I genuinely want to own 100 shares at the strike price?

2️⃣ Do I have enough cash to comfortably handle assignment?

3️⃣ Would I still be comfortable with the company if the stock fell another 10%, 20% or more after assignment?

🐕 For my NVIDIA trade, my answer is based on the price structure I chose. I bought a small amount around $218.86 for immediate exposure, while the $205 put gives me a lower potential entry point. With the $10.20 premium, my effective assignment price becomes approximately $194.80.

🎯 So my thinking isn’t “NVIDIA can never fall.” My thinking is almost the opposite: “NVIDIA can fall, and I want to be prepared for it.”

📈 **If the stock goes up, I participate through the shares and potentially keep the put premium. If it stays above $205, I may simply keep the premium. If it falls below $205, I am prepared to potentially acquire 100 shares at an effective cost of around $194.80.”

🐶 That is my Options Puppy philosophy: I don’t want to chase every green candle. I want to use options to create prices where I am happy with either outcome.

💡 At the end of the day, the goal isn’t to predict NVIDIA perfectly. Nobody knows whether NVIDIA will be $180, $205, $220 or $250 when November arrives. My goal is to create a plan that works across several possible outcomes while making sure I understand the risk before I enter the trade.

🚨 And remember: a cash-secured put can still result in substantial losses if the stock falls significantly. The premium only provides a limited cushion. Investors should consider their own risk tolerance, available capital, option experience and investment objectives before trading options.

📣 If you enjoy my Options Puppy trading journey, remember to 👍 Like, 🔔 Subscribe/Follow and 💬 Comment below. Tell me what price you would be comfortable buying NVIDIA at, and whether you would sell a $205 put for a $10.20 premium or choose a different strike.

🐶🚀 Options Puppy rule: I don’t need NVIDIA to go up tomorrow. I just need to know the price I am willing to pay if the market gives me the opportunity. For me, that means having some exposure around $219 while getting paid to potentially buy more around an effective $194.80.

⚠️ Disclaimer: This is my personal trading strategy and educational discussion, not financial advice or a recommendation to buy or sell NVIDIA or any options contract. Options involve substantial risk and may result in significant losses. A cash-secured put still carries downside risk if the underlying stock falls sharply. Always understand the contract terms, expiration date, assignment risk, capital requirements, fees and tax implications before trading.

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