To The Moon

$Nvidia (NVDA)$

Possibly to avoid the triple witching, institutions rolled their covered calls on Thursday. The strike prices were notable.

$113 was undoubtedly painful, learning from having selected too low a strike previously. This time, they rolled to two different strikes, $121 and $124:

Rolling $NVDA 20240927 121.0 CALL$ 
Rolling $NVDA 20240927 124.0 CALL$ 

The age-old question remains - why am I interpreting this as rolling two different strikes, rather than a bullish call spread? It circles back to the challenges of discerning complex option order flow direction. Tesla and Coinbase had similar rolling activity on the same day, but the scanner showed completely different directional signals.

Interpreting it as a spread is also fine - it's the same underlying thought process. Institutions decided the upside next week may be difficult to capture precisely, so they're no longer utilizing a single strike price out of an abundance of caution.

Alternatively, we could sell calls at higher strikes or simply sell puts instead. For put sales, I'd peg $110 as a reasonable strike.

There were also $NVDA 20241115 119.0 CALL$  rolls on the same day, consistent with the bullish upside view targeting $121+ by November expiry.

$Tesla (TSLA)$

Similarly employing two different strikes for covered call rolls:

Rolling $TSLA 20240927 250.0 CALL$ 
Rolling $TSLA 20240927 260.0 CALL$ 

I won't be selling calls for next week. A safer put sale level could be $220, or I may just sell at-the-money puts now that my covered calls were rolled.

There were also bullish $TSLA 20241115 240.0 CALL$  rolls that same day.

$Coinbase Global, Inc. (COIN)$

Compared to the tech mega-caps, Coinbase has relatively underperformed. But institutions utilized the same two-strike approach for their rolls:

Rolling $COIN 20240927 195.0 CALL$ 
Rolling $COIN 20240927 182.5 CALL$ 

In any case, no major concerns for next week - a straightforward bullish stance is warranted. Though I haven't actually bought any calls myself.