For Week 7, I ended with $301 in realized gains, but the open positions left me in a rough spot heading into Week 8. In fact, I’m approaching a major blow to the account if things don’t turn around.
Nvidia Straddle: Lessons in Volatility
I started the week with the NVDA straddle from last week (175 calls / 170 puts), expecting volatility to continue. Instead, the market opened flat, and the position immediately took a big hit.
Lesson: Anytime we bet on a short-term move, we must cover the position by selling options against it. Without that protection, declines in volatility and time decay can eat away at the trade quickly.
As NVDA trended higher, I added to the calls and managed to recover much of the loss. By Tuesday, with momentum fading, I closed the trade at a $214 loss—much better than the nearly $1,000 drawdown I faced on Monday morning.
QQQ: My First Index Options Mistake
Then came the bad news. I opened a bearish position in QQQ after last Friday’s jobs report pushed the index below its upward trend line. I played it heavy for a reversal, but QQQ quickly recovered the trend line and trapped me in a tough spot.
This was my first time trading index options, and I learned quickly that size and planning matter. I had small hedges on the call side, which helped me lock in the week’s $301 gain, but the QQQ puts remain open going into Week 8 and are setting up for a potential large loss.
Lesson: Every trade needs a clear exit plan and a realistic assessment of what happens if the market moves against you. Going too heavy in one direction without proper hedging can devastate account value.
Takeaways This Week
- Avoid “hope trades” that rely on short-term moves
- Hedge straddles and strangles to offset time decay and volatility crush
- Always plan both sides of a trade—calls vs. puts
- Control size when trading something new (like index options)
By the close of Week 7, I had realized gains, but my QQQ position was down over $2,000. Heading into Week 8, I’m hoping for a pullback with the upcoming inflation data—but the lesson is clear: discipline and risk management must come first.
🎥 Watch the full breakdown in my Week 7 Recap video here: