Nvidia 2X Leveraged ETF weekly expiration options online, annualized return 214% !
Yesterday after finishing the article, I realized that with 200 million bro's all-in bet of $2 billion, it's a foregone conclusion that Nvidia will surpass $1000 in Q2 earnings. Are you all prepared?
The market makers were even more ruthless than expected this week. During my replay on Monday, I pointed out that four heavy open interests must kill three of them, but I didn't expect the 950 calls to get killed in the end. However, it doesn't mean the 930 puts survived either, with only 6,531 open interest remaining. Many ran away on Monday and Tuesday.
Looking at the open interest situation, next week may continue to trade sideways. The top open interest is still the $NVDA 20240405 1000.0 CALL$ with 12,000 open interest, undoubtedly expiring worthless next week. Those with enough margin can consider selling, with an annualized return of 12.9%. The second is 940 with 10,200 open interest, likely the price ceiling next week.
For put options, there are 795, 850, and 930 with open interest below 8,000. If next week's range remains within this week's, many buyers may close their positions.
So my choice is to continue selling next week's at-the-money put options, $NVDA 20240405 900.0 PUT$ . Collecting option premiums over weekends is very satisfying. If feeling uneasy, you can refer to 200 million bro's strike of 880 or the previous low of 850.
Finally, the main highlight - the weekly options for $GraniteShares 2x Long NVDA Daily ETF(NVDL)$ are now online! Selling the at-the-money put option $NVDL 20240405 41.5 PUT$ offers an annualized return of 214%, with margin requirements only $4,000 compared to Nvidia stock. Although leveraged ETFs require 100% margin for assignment, equivalent to 100 shares at the strike, the probability of Nvidia dropping after earnings is extremely low, so assignment won't result in a loss.
If not considering assignment, selling out-of-the-money puts is an option. Based on 880, it would be selling $NVDL 20240405 40.0 PUT$ , it would be selling NVDL 20240405 37.0 PUT$ with an annualized return up to 49%.
Worth mentioning, the weekly options for $Reddit(RDDT)$ also online today, so next week could be interesting.
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- Tom Chow·03-29goodLikeReport