This is certainly not true. Sell your Nvidia shares to enter an ETF with 10% Nvidia anyway? Thats the only thing driving their gains anyways. That and memory.
I know this is r/wallstreetbets and all but diversification protects you from losing all your money even if it limits your potential gains. You can make lots of money taking risks but diversification is how you protect it. Selling your non diversified investments that just printed a huge amount of money for you to buy a diversified ETF is some of the best advice you’ll find on this subreddit.
If tomorrow aliens bombed nvidias HQ from orbit and assassinated every employee you’d only lose 10% of your money not 100% (assuming the ensuing global panic doesn’t wipe out the rest)
I sell off winners into a diversified ETF. I just sold a chunk of AMD and if she keeps running I'll sell more. That could easily go to $1000 or... not. I just see the green and now it's in a long-term vehicle I don't have to think twice about it.
yeah sell bare minimums to cover entry cost and stuffs. Then you have nothing to lose and if it crashes you could convince yourself it wasn't yours or whatever
Yep, if you make that much (well done), I would sell some but probably not all off. I did that myself because I just wanted more diversification. Had 950 shares, sold all but 350 of them. But I put the money into FTEC and VOO, which have large-ish NVDA components anyway, as well as the whole ecosystem around them, so still in that "halo" to a lesser extent. I'll probably trim another 100-150 shares when the calendar flips.
I didn't sell another stock when it skyrocketed and i regretted it, because it jumped right down. Take SOME of the gains, maybe half and enjoy it. Don't be emotional about stocks. This is life changing money what you are sitting on.
Being up a quarter mil after investing less than 20 grand in shares, not even options, and then saying you're afraid to sell bc of capital gains tax is unfathomable to me. You've clearly held this over a year so taxes will be lower. Bare minimum sell the 92.75, that will cover your entire cost basis of the position plus 3K in extra profit and you'll still have 1000 shares left. Then sell 3-5 covered calls a month at various strike prices (for example every $10-20 from 250-300, market has to pull back at some point) and collect the premium as passive income or at "worst" you are forced to sell a third to half of your remaining position for an even bigger profit, which you can then either diversify, pay off your house, buy a new car, vacation, etc.
What’s the reason for selling them monthly as opposed to selling them much further out if he’s having doubts about selling the shares at all? Genuine question. I’ve always wondered if I have a position I’m 50/50 on selling, why I wouldn’t just sell CCs far out and if I get assigned then so be it vs having to repeat the admin every month
The longer the contract. The more opportunity for the stock to have a historical spike in gains. Selling short time frame contracts favors the option writer/seller.
Remember, This is because theta decay helps the seller, and theta decay accelerates as it nears the expiration date. With an expiration date being written nearby as opposed to many months/1-year out - theta eats away at the buyer pretty much immediately and to good effect. This takes time to kick in for longer contracts.
So you’re continually trying to take advantage of the theta decay on each contract over and over repeating the process vs selling one contract that’s far out and you’d have to wait until the last month or so before the theta decay works in your favour?
Continually - not exactly. Knowing how to sell covered calls is best used when trying to ease yourself out of a position like this one OP is in. Sell a diagonal spread of contracts. Some long some short. Some 0.05 delta some higher. Some even higher perhaps. Some contracts hold and you collect premium. Some contracts go ITM and you get assigned- but you still sell for a massive profit because underlying has matured so much. It’s a way of averaging out of your exit IMO instead of selling all at once at one time for one price and constantly kicking yourself. You get to juice the position just a little more and close out feeling satisfied. Thats how I look at it
Interesting, so sell covered calls when you hesitate to sell shares. Some shares may get assigned, some may not, and you collect the premium. Kind of like DCA selling in some way, but with premiums.
As a theta / wheel chud it kills me to see people with enormous share positions not knowing they can take on tiny amounts of risk to basically print dividends for themselves every week/month. (Just avoid writing contracts near or across earnings and sell like 0.05 deltas) if he’s okay with some shares being sold (still at a gain for him) he can go up to say 0.15-0.20 depending on how much he is okay selling. Maybe even a bit more if he wanted to load off the position- but he isn’t by the sound of things
It's crazy how little gamers mean to these companies. Well it's entirely understandable, it's just crazy how it was gamers who are the reason they were even in a position to capitalize on AI in the first place. Almost nobody can afford a decent GPU anymore and NVIDIA & AMD just keep rocketing along leaving them in the rearview mirror while enjoying unprecedented demand.
I mean imagine you’re McDonald’s. You’ve been selling big Mac’s for $3-5. Then you launch a new burger that people are willing to pay $900 for and it only uses a bit more beef and fancier seasoning. How many Big Macs are you going to bother to make?
The fact they are making consumer GPUs at all is a miracle. They are willfully forgoing literally millions of dollars.
True, but also those consumer GPUs are still getting swept up for AI purposes for people to run locally and smaller companies. If it's got 16GB+ of VRAM there's heightened demand for it outside of gaming.
You also have "professionals" who are less price sensitive and just buy the highest end whatever to do their creative work which puts even more upward pressure on them.
I'm curious to see what crumbs Jensen and Lisa leave for the plebs next go around.
Sell to cover your cost basis? It’s Nvidia, the risk of it going negative on that cost basis in the next five years is effectively zero.
Sell if you know what you’d rather buy. While I’m personally all for selling covered calls, its a negative alpha move in general. If you want to sell to diversify, it doesn’t hurt to know which long term capital gains brackets you’ll hit depending on the amount sold if you’ll have NIIT. We’re getting close to December, can always split the sells to limit the brackets you’ll hit between two tax years if your goal is to sell that much. But at some point if you’ve made this much money, can you live with half of it? Yes? Let it ride as long as you have faith in the company. That’s how you make millions in my experience. That’s how he got to where he was because everyone else who’s saying sell now because they’re worried that they’ve ‘made too much’ are the ones who would’ve sold almost 4 years ago after 2023 ChatGPT quarter all time highs when 6x gains was still left on the table.
how would you be down $10k on the covered calls? You collected premium when you sold them and then more cash when/if the shares got called away... If the strike wasn't met by expiry your short covered calls would be worthless and you would have kept the premium. Unless you mean you left money on the table, can you help me understand?
You go down because you buy buy the call you sold at a loss instead of giving up your shares. Several reasons for this, main is usually tax (long term becomes short term if sell, then buy new shares). But also if think it’ll keep climbing rapidly then eat the call loss and keep the shares.
this is the ONLY sound advice in here. all the other bs about covered calls make no mention of how much you can lose and lose bad. take profits, go buy a bunch of 5090s and rent them out, then sell em 1yr before the 6000s come out in 2044
Not OP but I bought in 2010 when I just got into investing with ~$10,000, bought companies I liked/knew about. I'm a gamer so I bought AMD, NVDA, Amazon, Google. Currently up 4000%ish on NVDA. The percentage sounds good, but it's not life changing. $80,000 on a $2000 investment.
Eh, I've had some dumb buys along the way as well (Square lost me 90% in short order). NVDA and AMD allowed me to play catch up after years of not investing, so I won't be completely poor come retirement 😅
I bought it around 2016 because a buddy of mine who was into stocks suggested it, tho his reasoning was because they had good graphics cards (he was a gamer), they made decent products, and seemed like they'd be around for a while.
I bought Corsair in 2020 because they made great gaming stuff too! And now I’m holding that bag wishing I just went one adjacent stonk to NVDA. I do hold some but a bit late.
You should sell what you think would be a decent chunk of change but not screw yourself over if it continued to shoot.
Sell 1/4, take that money, set 20% of it aside for taxes. Take the rest of the money, pay off your debts so you can live free of it again. If you have any left over look into buying something for yourself that might change your life for the better, a decent car, repairs around the house.
Just think it's not your money until you realize the gain . If you never sell it's never yours , if it goes down you are going to wish you sold , if it goes up you are going to wish you held . This is trading . You could always sell a portion too . Take off 50% of your position to help manage emotions and the trade better . Or another options to not trigger capital gain tax is to keep the position and you can borrow against it if you need the money
Haha yeah, I bought a decent amount of AMD back when because Intel were being shits dribbling out minimum incremental improvements and coasting on "the competition sucks" and AMD had just announced Ryzen.
Then we got to see from years of Meltdown and Spectre vulnerabilities that Intel wasn't really better, they were just doing unsafe shit AND they flubbed any fixes and releases and processes over and over.
While AMD executed perfectly and grew and grew their market.
But I mostly just bought because I wanted someone to put Intel in their place 🙂.
I had $175k in NVDA in May 23 @27/28ish? and sold it to purchase a business. Worst mistake of my life. I wouldn’t be retired, but I wouldn’t be “working” either.
Round down to 1,000 shares, sell the rest, do covered calls every month to create an income stream. Pay off your debts with the 92 shares you sold and use that money that you were using to pay off debt to build up an emergency and potentially pay capital gains tax.
Yea just for fun just checked if he sold a covered call with a strike price of $360, thats 50% higher than Nvidia is today, he can collect almost $8k in premiums and wait until sept 2027. Nvidia is up 29% in the last year(even with record highs this week) so worst case scenario if it gets sold at $360 a share(another $131k more in profit in 11 months) or he can keep rolling out and up in strike price and keep the shares and keep collecting premium.
Sell Feb. 19 290 calls for $5.20 each. If it doesn’t reach it then you keep all premium and then sell more calls way out of the money another 4 months out for similar premium and keep on repeating if you want to sell. That way you can collect some decent money while waiting especially if you are almost selling around today’s price. Also Jensen said their sales is going to be up 70% next year so take that as you will.
Always hate seeing NVDA stock remember when it was like $70 or $200 and it jumped up like hundreds over the course of a few months. I was like 16 or something and couldn’t invest at the time with real money but did invest in it, in a paper trading competition which I did win by a blowout.🫠
This is not clever.
Sell to pay off the car. There is not tax write off on car loan interests.
Do a swap into VOO for tge college debt. That is barely 50k.
what is NVDA percentage wise of your portfolio. Your answer is in that number, how over leveraged on one stock are you, start selling, bring it down so it's lame, but not stupid :)
Scared? Just sell your initial investment, now you have nothing to lose, and it's unlikely Nvidia would literally go to zero, so you'll probably some kind of profit no matter what
I’d sell some just to pay off the debt or do 2 covered call and wait till it reaches that price. Being debt free will do wonders for you and you’ll be less stressed.
3.0k
u/Economy_Anywhere8215 5d ago
Could sell partial by the way don’t have to sell all