As of May 23, 2025, our covered call stock portfolio stands at $6,888, reflecting a -0.93% week-over-week decline (down $64.48). Year-to-date, we are down -9.33%, as we navigate volatility while optimizing our options income strategy.
Rolling NVDA Calls for Controlled Upside
This week, we rolled our NVDA covered call to the June 27, 2025 expiry, raising the strike to $109. Should NVDA close at or above that level at expiry, the position would yield a maximum profit of around $150. However, we remain focused on retaining the shares rather than letting them be called away. If momentum continues, we’re ready to roll the strike higher to maintain upside exposure and capture premium.
Credit Spreads for Additional Yield – But With Margin Risk
To compensate for the lower near-term yield from the longer-dated call, we initiated a weekly credit spread on NVDA. This trade supplements income but adds considerable margin risk.
Currently, our portfolio carries a margin debit of -$6,230. If our 117 strike short put is assigned, our margin liability would spike to ~$18,200, an outcome we are strategically working to avoid.
Hence, avoiding put-side assignment is a top priority at the moment. We're closely tracking NVDA price levels and implied volatility to adjust the position if needed.
Exploring Alternatives, But Staying Long NVDA
We briefly explored the idea of letting the covered call get assigned at $109, then re-entering with short puts at higher strikes, such as $125. However, we ultimately prefer to retain the shares and compound gains through premium income. This preference is what led us to expand the use of credit spreads, balancing income generation with exposure control.
Earnings Catalyst and Strategic Objective: Debt-Free Ownership
NVDA reports earnings on May 28, a key volatility catalyst. We are approaching the event with flexibility—ready to react based on post-report market direction.
Importantly, this week we earned $89 in options premium. If we can consistently average $89/week, it would take approximately 70 weeks to fully eliminate our margin debt of $6,230—putting us on track for debt-free NVDA ownership by the end of September 2026.
This is the strategic goal: use options income to gradually pay down margin, retain long-term exposure to high-conviction equity, and own the position outright within the next 16–17 months.
Key Takeaway
We are executing a disciplined income strategy with NVDA at its core—covered calls, weekly credit spreads, and careful margin management. With earnings around the corner and a defined long-term goal, every week’s premium contributes to moving us closer to unleveraged ownership.
