Background
In May 2026, NVDA plunged 12% in a single week, leaving my Sell Put position deep in the money. Strike price: $780. Stock price: $692.
Decision Framework
There are three core questions when rolling:
- Timing: When is rolling more profitable than holding?
- Direction: Roll Down, Roll Out, or Roll Down & Out?
- Cost: What’s the net cost of this roll?
Trade Details
Original position: NVDA $780 Put, expiring 2026-05-17, premium collected $4.20
Stock price at the time: $692 (down 11.3%)
Delta: -0.82 (deep in the money)
Theta: +$0.08/day (virtually no time decay advantage)
With Delta > 0.8, the Put moves almost dollar-for-dollar with the stock. Holding at this point means you’re betting on a rebound, not earning Theta.
Rolling Execution
Bought back original position: Closed at $91.50 (loss of $8,730) Sold new position: NVDA $720 Put, expiring 2026-06-28, premium collected $18.40
Net cost: $8,730 - $1,840 = $6,890
Outcome
NVDA rebounded to $748 by late June. The new position expired safely, and the full premium was collected.
Iron Rules
- When Theta < $0.10 and Delta > 0.75: evaluate rolling immediately
- Don’t wait until the final week to roll — liquidity is worst then
- Rolling isn’t about getting out of a losing trade — it’s about rebuilding a favorable win-rate structure
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