For: Year-End Options Recap: Share Your Most Memorable Trade of 2025!
Title: My 2025 Lesson: Trading Volatility, Not Just Direction
2025 was the year I learned that in a market driven by macro swings and AI euphoria, managing volatility is more critical than predicting direction.
The Memorable Trade: NVDA "Iron Condor" during April's Tariff Panic.
· Setup: With NVDA at all-time highs and geopolitical headlines sparking fear, I sold an out-of-the-money call spread and put spread ahead of earnings (the "Iron Condor").
· Thesis: I didn't know if NVDA would go up or down, but I believed the extreme implied volatility was overstated. The market was pricing in a massive move (>±10%), but I expected a binary "relief rally" or "sell-the-news" drop, not a complete breakout.
· Outcome: NVDA gapped up 6% post-earnings but stayed within my put spread's short strike. The stock then churned for a week as the tariff news flowed. Both sides of the condor expired worthless. I captured the full premium as volatility (the "Vega") collapsed.
The Lesson:
This trade wasn't about being bullish or bearish on AI. It was about recognizing that options are a tool to trade market sentiment and volatility itself. When fear and greed reach extremes (high IV), selling premium can be a smarter play than taking a directional bet. 2025 taught me to respect headlines, but to trade the options market's reaction to them.
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