Blink and $30 daily option income from selling nvdia calls
📈 Every Dollar Matters
Many people think that after selling a covered call, the only thing to do is wait until expiry. I look at it differently. Every movement in the option premium is another opportunity to increase my overall return while still following my original covered call strategy.
In this trade, I sold the NVIDIA (NVDA) August 7 $215 covered call and noticed the option premium fluctuating within minutes. Instead of sitting and watching, I decided to scalp the option by buying it back when it became cheaper and selling it again when the premium recovered.
From the screenshots, I was able to realise approximately USD $20 in actual trading profits from these short-term buy and sell transactions. On top of that, my remaining covered call position still showed about USD $6.23 of unrealised (paper) profit.
Although these are not huge amounts individually, they add up over weeks and months.
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💰 Turning Time into Income
Options are unique because they lose value as time passes.
This is known as Theta decay.
Every day that passes without NVIDIA making a large move, the option slowly becomes less valuable.
As the seller of the covered call, I actually benefit from this.
In my example, the option’s Theta is roughly -$0.10 per share per day.
Since one option contract controls 100 shares, that works out to approximately:
* Theta = $0.10 × 100
* ≈ USD $10 per day
Simply by holding the covered call overnight, time is theoretically working in my favour, assuming other factors remain similar. Theta is an estimate and changes with price, volatility, and time remaining, so the actual amount earned from time decay will vary.
Instead of paying Theta, I collect Theta.
That is one reason why I enjoy selling options rather than buying them.
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📊 Why I Didn’t Simply Hold
Many investors would have ignored these small fluctuations.
If I had done absolutely nothing:
✅ I would still have collected Theta.
However:
❌ I would have missed the chance to realise around USD $20 by actively trading around my covered call position.
Those realised profits immediately become cash in my account.
They are no longer dependent on where the option finishes later.
I like locking in small wins whenever the market offers them.
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🎯 Small Wins Compound
Some people only chase big profits.
I prefer collecting many smaller profits.
Imagine earning:
* $20 today
* $18 tomorrow
* $25 another day
* $15 the following week
After dozens of trades, those smaller gains can accumulate into a meaningful amount over time.
This is the same philosophy behind collecting option premiums.
Many small streams eventually become a river.
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📉 Why the Option Premium Moved
The option price changes because of several factors.
The main ones are:
* NVIDIA’s share price
* Time remaining before expiry
* Implied volatility
* Market demand
During the trading session, the option moved between roughly $2.79 and $2.91.
Those movements allowed me to buy lower and sell slightly higher.
Even though each move was only a few cents, every cent equals USD $1 per contract because one option represents 100 shares.
A difference of 10 cents equals approximately USD $10.
Those small price changes matter.
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📈 Why I Chose the $215 Strike
Looking at my chart, NVIDIA was trading around $195.55.
My covered call strike price was $215.
That means there was roughly $19.45 of upside before the shares would reach my strike.
By choosing a strike above the current price, I was giving the stock room to move higher while still collecting option premium.
If NVIDIA remains below $215 at expiry, the option could expire worthless and I keep both:
* the premium collected, and
* my shares.
If NVIDIA rises above $215, my shares could be called away at that price, meaning I would sell them for $215 per share. Whether that is a good outcome depends on my investment plan and cost basis.
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🧠 Active Management Instead of Passive Waiting
Covered calls don’t have to be “set and forget.”
Sometimes I simply hold until expiry.
Other times, when premiums fluctuate enough, I actively manage the position.
That could mean:
* buying back the option cheaper,
* selling it again if premiums rise,
* or closing the position early if my outlook changes.
Each decision aims to improve the overall return while keeping risk in mind.
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⚖️ Understanding the Risks
While scalping covered calls can increase returns, it is not risk-free.
If NVIDIA suddenly rallies strongly, the option premium can rise quickly. Buying back the call could become more expensive than expected, reducing or even eliminating earlier gains.
Frequent trading can also increase commissions, bid-ask spread costs, and taxes in some jurisdictions.
For these reasons, I only scalp when I believe the potential reward justifies the extra trading.
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💵 Building Multiple Sources of Return
One reason I like covered calls is that they can generate returns from several sources:
1. Option premium collected when selling the call.
2. Theta decay, which can reduce the option’s value over time if conditions are favourable.
3. Small trading gains from buying back and reselling the call when opportunities arise.
4. Potential share price appreciation up to the strike price.
Not every trade will deliver all four, but together they illustrate why some investors use covered calls as an income strategy.
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🏆 My Final Thoughts
This trade wasn’t about making hundreds of dollars in a single day. It was about improving the efficiency of an existing position.
By actively managing my NVIDIA covered call, I realised about USD $20 from short-term option price movements. I also had about USD $6.23 of unrealised profit remaining on the open covered call. If I continue holding the position, Theta may further reduce the option’s value over time if NVIDIA stays relatively stable, although the actual outcome depends on price movements and volatility.
For me, investing is not only about predicting where a stock will go. It is also about using options to potentially generate additional income while managing a position I already own.
Over time, many disciplined decisions and modest gains can add up, and that’s the mindset I aim to follow with my covered call strategy.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
