If NVDA goes to 150, the idea is to sell 150 cc for next month --- most likely for $8 each contract.
- Sell 1 NVDA 150 call at $8
If NVDA continue to rise, we use butterfly to extend it
- Buy to cover 1 NVDA 150 call
- Sell 2 NVDA 165 call
- Buy 1 NVDA 180 call
Most likely this butterfly combo will only cost $3.
If NVDA only rise to 165, you will be able to essentially extend the 150 cc to 165. If NVDA rise too much and above 180, then you will still be assigned at 150 (which is not much worse than without butterfly anyway) ----- This is not counting the credit you received above.
