What you need
- Wheel Strategy is the foundation: sell cash-secured puts → get assigned → sell covered calls → repeat
- Nvidia offers tighter spreads, lower IV (~40-50%), better for conservative premium selling
- Tesla has extreme IV (60-90%), perfect for aggressive premium collection but requires massive capital
- Earnings plays require defined-risk strategies (spreads, iron condors) to avoid blow-up risk
- Greeks matter: Delta for directional bias, Theta for decay, Vega for volatility sensitivity
- Position sizing is critical: never risk more than 2-5% of portfolio on single options trade
Why Trade Options on Nvidia & Tesla?
Nvidia (NVDA) and Tesla (TSLA) are the ultimate options trading vehicles for Bro Billionaire investors. Here's why:
Extreme Liquidity
NVDA and TSLA have the tightest bid-ask spreads in tech. $0.01-0.05 spreads on ATM options. You can enter and exit positions instantly without slippage.
High Implied Volatility
IV of 40-90% means fat premiums. Selling a 30-day call on TSLA can yield 2-4% monthly—48%+ annualized if you can sustain it.
Trending Momentum
Both stocks have directional bias (AI boom for NVDA, EV/robotics for TSLA). You can combine premium selling with directional exposure.
Multiple Expirations
Daily, weekly, monthly, quarterly expirations available. You can dial in exact DTE (days to expiration) and theta decay targets.
If you're going to learn options, learn them on the best vehicles. NVDA and TSLA offer everything you need: liquidity, volatility, and opportunity.
Contrarian Take
Most analysts focus on Nvidia's GPU dominance, but they're missing the real story: their software moat through CUDA. Competitors can match chip performance, but can't replicate a decade of developer ecosystem investment.
Strategy #1: The Wheel Strategy
BEGINNER-FRIENDLYThe wheel strategy is the holy grail of options income. It's simple, mechanical, and generates consistent cash flow if executed properly.
How It Works (Step-by-Step)
The Wheel Cycle
Step 1: Sell Cash-Secured Puts
You want to own Nvidia at $900? Current price is $950. Sell the $900 put expiring in 30 days. Collect $1,800 premium (2% yield).
Two Outcomes:
- NVDA stays above $900: Put expires worthless. Keep $1,800. Repeat next month.
- NVDA drops below $900: You get assigned 100 shares at $900. Your effective cost basis is $900 - $18 = $882 (because you collected premium).
Step 2: Sell Covered Calls
You now own 100 shares at $882. NVDA trading at $920. Sell the $950 call expiring in 30 days. Collect $2,200 premium (2.4% yield).
Two Outcomes:
- NVDA stays below $950: Call expires worthless. Keep shares + $2,200. Repeat next month.
- NVDA rises above $950: Shares called away at $950. You profit: ($950 - $882) + $2,200 = $7,000 per contract.
Step 3: Repeat Forever
Once shares are called away, start selling cash-secured puts again. The wheel never stops turning.
Advantages
- Consistent income generation (2-4% monthly)
- Acquire stock at discount via puts
- Defined risk (capped at share ownership)
- Works in flat/choppy markets
- Mechanical, emotion-free execution
Risks & Downsides
- Unlimited downside if stock crashes (you own shares)
- Capital-intensive ($35K-$90K per contract)
- Opportunity cost if stock rips higher (capped gains)
- Assignment can happen early (dividends, etc.)
- Requires discipline to avoid "rolling" bad trades
Critical Rule: Strike Selection
Never sell puts at strikes you wouldn't want to own the stock at. If you're not happy owning NVDA at $800, don't sell the $800 put for a fat premium. This is how traders blow up—they chase yield and get stuck with shares 30% underwater.
Rule of thumb: Sell puts at strikes that are 5-10% OTM (out of the money) on stocks you genuinely want to own long-term.
Strategy #2: Covered Calls (Premium Income)
BEGINNERIf you already own NVDA or TSLA shares, covered calls are the easiest way to generate 1-3% monthly income without selling your position.
Strike & Expiration Selection Guide
| Goal | Strike Selection | DTE | Expected Yield | Risk Profile |
|---|---|---|---|---|
| Aggressive Income | 5-8% OTM | 7-14 days | 1-3% per trade | High assignment risk, max income |
| Moderate Income | 8-12% OTM | 21-30 days | 1.5-2.5% per trade | Balanced risk/reward |
| Conservative | 10-15% OTM | 30-45 days | 0.8-1.5% per trade | Low assignment risk, capital preservation |
| Earnings Play | 3-5% OTM | Expires after earnings | 3-5% (single trade) | Extreme IV crush, high premium |
Real Example: TSLA Covered Call
Setup:
- Own 100 shares of TSLA at $350 (cost basis)
- Current TSLA price: $360
- IV: 75% (very high—good for premium selling)
Trade: Sell 1x TSLA $380 call, 21 DTE
Premium Collected: $640 (1.78% yield on $36,000 position)
Scenarios at Expiration:
- TSLA < $380: Call expires worthless. Keep shares + $640. Annualized return: ~21%
- TSLA > $380: Shares called away at $380. Total profit: ($380 - $350) cost basis + $640 premium = $3,640 (10.4% return in 21 days)
Breakeven: Your effective sale price is $380 + $6.40 = $386.40. If TSLA moons to $400, you "miss out" on $13.60/share. This is opportunity cost, not a realized loss.
The #1 Mistake: Rolling Losing Covered Calls
You sell a call. Stock drops 20%. Call is now deep in the money. You panic and "roll" it (buy back expensive call, sell cheaper one further out). This locks in losses and increases risk.
Better approach: Let it ride. If called away, move on. If stock crashes, you still own it—no different than if you never sold the call. Don't chase losses by rolling.
Strategy #3: Put Credit Spreads (Defined Risk)
INTERMEDIATEPut credit spreads are defined-risk versions of cash-secured puts. You collect premium betting the stock won't fall below a certain level, but your max loss is capped.
How It Works
A put credit spread involves:
- Sell a put at strike A (collect premium)
- Buy a put at strike B (lower strike, pay premium)
- Net credit = premium collected - premium paid
Example: NVDA Put Credit Spread
Setup:
- NVDA trading at $950
- You believe NVDA won't drop below $900 in next 30 days
Trade:
- Sell NVDA $920 put @ $11.50
- Buy NVDA $900 put @ $7.20
- Net credit: $4.30 per share = $430 per contract
Max Profit: $430 (if NVDA > $920 at expiration)
Max Loss: ($920 - $900) - $4.30 = $15.70 per share = $1,570 per contract
Risk/Reward: Risk $1,570 to make $430 (27.4% ROI if win)
Probability of Profit: ~65-75% (based on delta of short put)
Payoff Diagram (at Expiration)
Max Profit: Above $920 (keep all premium)
Breakeven: $920 - $4.30 = $915.70
Max Loss: Below $900 (loss is capped at $1,570)
This is why spreads are superior to naked puts—your risk is defined and manageable.
Why Use Credit Spreads?
- Defined max loss (can't blow up account)
- Lower capital requirement (1/5th of cash-secured puts)
- Still collect premium like selling naked options
- Can size up position (5-10 contracts vs 1)
- Works great for earnings plays
Downsides
- Lower premium collected (you pay for protection)
- Max profit is capped (can't run to zero like CSP)
- Pin risk near expiration (assignment complications)
- Requires monitoring (don't set and forget)
Strategy #4: Earnings Iron Condor (Volatility Crush)
ADVANCEDThe iron condor is the ultimate earnings play. You're betting that the stock stays within a range after earnings, profiting from IV crush regardless of direction.
Structure
- Sell OTM call spread (bearish side)
- Sell OTM put spread (bullish side)
- Collect premium from both sides
- Profit if stock stays between short strikes
Example: NVDA Earnings Iron Condor
Setup:
- NVDA trading at $950, earnings tomorrow
- IV is 85% (juiced for earnings)
- Expected move: ±$90 (9.5%)
Trade (using expiration week after earnings):
- Call Side: Sell $1,040 call / Buy $1,060 call → Collect $320
- Put Side: Sell $860 put / Buy $840 put → Collect $310
- Total Credit: $630 per iron condor
Profit Zone: NVDA between $860 and $1,040 (profit up to $630)
Max Loss: $2,000 - $630 = $1,370 (if NVDA moves outside range)
Breakevens: $860 - $6.30 = $853.70 (downside) | $1,040 + $6.30 = $1,046.30 (upside)
Major Risk: Black Swan Earnings Moves
If NVDA reports a surprise (guidance cut, tariff impact, etc.) and moves 15-20% overnight, your iron condor gets destroyed. Max loss hits immediately.
Mitigation: Size appropriately (risk only 1-2% of portfolio). Use wider wings ($30-50 wide instead of $20). Avoid holding through binary events (FDA approvals, regulatory news).
Understanding Options Greeks
Greeks are the metrics that determine how your options position will behave. If you don't understand Greeks, you're gambling, not trading.
| Greek | What It Measures | How To Use It | Ideal Value |
|---|---|---|---|
| Delta (Δ) | Directionality. How much option price changes per $1 move in stock. | High delta (0.7+) = acts like stock ownership. Low delta (0.2-0.3) = premium collection with low assignment risk. | Selling: 0.20-0.35 delta Buying: 0.60-0.80 delta |
| Theta (Θ) | Time decay. How much value option loses per day. | As a seller, theta is your friend. Higher theta = faster decay = faster profit. Target options with 7-45 DTE for max theta. | Selling: High theta (0.05+/day) Buying: Low theta |
| Vega (ν) | Volatility sensitivity. How much option price changes per 1% change in IV. | High vega = options price sensitive to IV swings. Sell high IV (collect fat premium). Buy low IV (cheaper entries). | Selling: High vega (IV > 50%) Buying: Low vega |
| Gamma (Γ) | Rate of delta change. How fast your delta accelerates as stock moves. | High gamma = delta changes fast (risky near expiration). Low gamma = stable, predictable. Avoid selling high gamma options. | Selling: Low gamma (>30 DTE) Buying: High gamma (scalping) |
Practical Example: Reading Greeks
You sell TSLA $380 put, 30 DTE. Greeks:
- Delta: -0.28 → 28% chance of expiring ITM. For every $1 TSLA drops, you lose $28 per contract.
- Theta: $0.12/day → You earn $12/day from time decay (if stock doesn't move).
- Vega: 0.45 → If IV drops 10% (volatility crush), option loses $4.50 in value—you profit $450/contract.
- Gamma: 0.008 → Low gamma = delta won't change much unless stock makes big move.
Interpretation: This is a good premium-selling setup. Low delta (unlikely assignment), high theta (time decay working for you), positive vega exposure (profit from IV crush). Risk is defined ($28 loss per $1 drop in TSLA).
Position Sizing & Risk Management
The difference between profitable options traders and blown-up accounts is one thing: position sizing.
The Golden Rule of Options Trading
Never risk more than 2-5% of your portfolio on a single options trade.
If you have a $100K account:
- Conservative: $2K max risk per trade (2%)
- Moderate: $3-4K max risk per trade (3-4%)
- Aggressive: $5K max risk per trade (5%)
This ensures you can survive 10-20 consecutive losses without blowing up. Most traders break this rule and die on their first big loss.
Position Sizing by Strategy
| Strategy | Portfolio Size | Max Position | Number of Contracts |
|---|---|---|---|
| Wheel (NVDA) | $100K | 1 contract ($90K deployed) | 1 contract max |
| Wheel (TSLA) | $100K | 2-3 contracts ($70-105K deployed) | 2-3 contracts |
| Credit Spreads | $100K | $2-5K risk per trade | 2-5 contracts (depending on width) |
| Iron Condors | $100K | $2-4K risk per trade | 1-3 condors |
The Bro Billionaire Options Playbook
Options on Nvidia and Tesla offer unmatched liquidity, volatility, and opportunity. But they also demand respect, discipline, and proper risk management.
Start with the wheel strategy. Master it. Then graduate to spreads, condors, and advanced structures. Never risk more than 5% per trade. Size properly. Let theta work for you.
Trade smart. Collect premium. Compound wealth.