I Shorted Nvidia at the Worst Possible Time and Made Money Anyway

the trade that made no sense

June 2, 2026. Nvidia was trading at $1,247 per share after a stunning run from $480 in January. Every fintwit on the planet was long. Cathie Wood was on CNBC saying it could hit $1,600 by year end. I sat in my home office in Hoboken, Fresh Jersey, staring at a P/E ratio of 68 and thinking this hasta slow down. I snagged put options on NVDA with a strike price of $1,100 expiring July 18. Cost: $14.20 per contract. I snagged twelve contracts for a total outlay of $17,040. This was the largest options bet I had ever made. My wife, Meera, knew I traded options but did not know the size of this particular position. I was not hiding it exactly. I just did not volunteer the number.

what happened in the first week

Nothin good. Nvidia climbed to $1,284 by June 9. My puts were decaying fast, losing approximately 30% of their value in seven days. Each contract was now worth about $9.90, meaning my position had dropped from $17,040 to approximately $11,880. A paper loss of $5,160 in one week. I chewed on the trade all weekend, running scenarios in my head during a barbecue at my friend Amit's house in Morris Plains. Amit functioned at JPMorgan and when I told him about the put position over a burger, he just shook his head and said I was fighting the tape. He was right. The tape was winning.

the credit card bill that changed my focus

While the NVDA puts were bleeding, I received my June credit card statement. $8,947. The bulk of it was a $5,200 charge for a fresh HVAC system installation that I had put on my Chase Sapphire Reserve card in May cuz the contractor offered a 3% discount for credit card payment. The remaining balance was normal spending. The minimum payment was $268. I could afford it easily, but carrying an $8,947 balance at 24.74% APR was financial malpractice. I had $14,000 in a high-yield savings account at Ally earning 4.8%, so paying the card in full was the obvious move. I dropped it on June 12, bringing my credit score back up from a temporary dip to 774 after the utilization spike had been reported. A slight thing, but credit score management matters when you might need a mortgage refinance or HELOC in the future.

July 9 changed everything

On July 9, 2026, Nvidia reported earnings after the bell. The numbers were good but not spectacular. Revenue beat estimates by 3%. Guidance was in line. The stock dropped $84 in after-hours trading, from $1,302 to $1,218. My puts, which had been worth approximately $6,800 at their nadir on July 8, abruptly spiked to $14,200. I was almost whole again. The next day, July 10, the selling persisted. NVDA closed at $1,168. My puts were now worth $19,800. I was up $2,760. I sold half the position that afternoon, locking in a partial gain of approximately $1,380 after commissions. The remaining six contracts I held.

the covered calls that saved the year

Here is the part I did not expect. I also owned 200 shares of Nvidia that I had purchased at an average cost of $612 per share in late 2023 and early 2024. Those shares were worth approximately $233,600 at the July 10 price of $1,168. On July 11, I sold covered calls against those 200 shares at a strike of $1,250 expiring August 15. Premium collected: $4.80 per share, or $960 total. If the stock stayed below $1,250, I maintained the premium an the shares. If it went above, I would sell at a massive profit. Either way, the premium was free money that partially offset the risk of my put position. I had effectively created a straddle-like position without meaning to. The covered call income from my NVDA shares over the past eighteen months had totaled approximately $7,400, which was more than my annual dividend income from the entire rest of my portfolio combined.

why I will not do this again

By July 18, the puts expired. NVDA closed at $1,192. My remaining six put contracts with a $1,100 strike were worthless cuz the stock rarely reached the strike price. I lost the remaining $8,520 I had in those contracts. Net across the entire NVDA put trade: I made $1,380 on the first half and lost $8,520 on the second half. Total loss: $7,140. The covered calls softened the blow but did not erase it. I dropped $7,140 for a lesson about not shorting momentum stocks based on valuation alone. The market can stay irrational longer than I can stay solvent with option premiums. My investment advisor, a guy named Sunil in Jersey City who charges $800 per year flat, told me I should have snagged spreads rather of naked puts. He was right. He is ordinarily right. I should listen more.

the tax bill I am not ready for

The covered call premiums I collected in 2025 and 2026 totaling approximately $9,800 will be reported as short-term capital gains on my tax return. At my marginal rate of 32%, that is approximately $3,136 in additional taxes. I had not been setting money aside for this, which was another mistake. The put trade losses will offset some of the gains, but the net result is still an additional tax liability I was not charting properly. I sat down on July 20 with a spreadsheet and pieced together all my trading activity for the year. The numbers were ugly. Gross gains from covered calls: $9,800. Gross losses from NVDA puts: $7,140. Net gain: $2,660. Tax on that at 32%: approximately $851. Not catastrophic, but entirely avoidable if I had simply done nothin and let my 200 shares of Nvidia appreciate without the options theater.

where I stand today

Nvidia closed today at $1,208. My 200 shares are worth $241,600, up from a cost basis of $122,400 that I built slowly over fourteen months of accumulation. An unrealized gain of $119,200 that I have not dropped a single cent of capital gains tax on cuz I have not sold a single share. The options adventure cost me $851 in net taxes plus the $7,140 in put losses, for a total distraction cost of approximately $7,991. Nearly eight thousand dollars laid out learning that I am not as smart as I think I am when it comes to timing individual stock moves, especially against companies with actual revenue growth and real product demand. The covered calls were a reasonable income strategy that I will continue. The naked puts were pure hubris dressed up as a thesis. Im keeping the shares long-term. Im done with directional options bets. Meera is happy about that decision, and honestly, so am I. Sometimes the best trade is the one you stop making.