re: Nebius - NBIS - AI Infrastructure Company

Got a 10/17 $138 that I bought when I thought it was the dip.

If we hit 126 or 127 I may unload it, but I’m not sure what to do right now.

Of course! I pay attention to everything you, IT_Dawg, and few others share. So here’s my situation.

Im playing with a small amount of money that my wife doesn’t know about. Im loving every second of it.

I got 2 calls
10/17 $138 Break even 141,40
10/31 $133 Break even 145.60


I’m not sure what to do. The 10/31 has a lot of money in it. (For me, not guys like you or IT_dawg)

Gotcha. So the biggest problem is that you are choosing strike prices that are unrealistically high for the allotted time frame. That’s why the contracts are so cheap.
This could be an ok strategy on a dip as long as you know that you’re buying them for a very quick 10-20% gain.

So, buy at 3.40 and immediately set a limit sell for 3.80. That kind of thing…

Options inside of 30 days to expiration get eaten alive by theta decay, in other words, time!

Meaning, If you buy a far out strike, each minute that the stock isn’t rocketing toward it is going to result in money lost. Three weeks is worse than four, one week out is much, much, worse than three, etc.

I would sell both contracts immediately on a pop tomorrow to preserve capital. Then I would gather my funds and take a more reasonable approach.
This means buying one or two 11/21 $130 calls (or whatever you can afford).

This is what I would do. It’s most prudent. Sure, the stock could hit $145 by some miracle this week or next, but miracles don’t make for great investment strategies.

When I target closer dated options, which I don’t do much of, I’m selecting a strike price that is only a small amount Out of the money. It’s even safer to buy one IN the money (below current stock price). Even still, target 30% gains or so and move on.

The reason that IT and I really like the 11/21 expiry date is because we know that a huge event will precede it—an event that we have good reason to believe will result in a 10-20% pop for the share price. That event is the Q3 earnings report.
In fact, the same exact thing happened for Q2 earnings on 7 August. Share price rose nearly 20 percent.

Last, look at “Delta” on your options in Robinhood. I generally wouldn’t touch a contract with a delta below .40
If I do, again, I’d be looking to exit that trade within minutes.
Having looked at what I currently hold and what I’ve recently held, my preferred delta is right at .50

The delta on your 10/17 $138 is .24

Last thing:
Traditional options expiry dates are the third Friday of each month. I typically buy those options contracts as they have higher volume traded and most importantly, narrower bid/ask spread.

Additionally, pick strike prices that are heavily traded. 120,125,130,140, etc.
You actually need to look at the volume on each contract before you purchase it. Your $138 contract only attracted twenty total buys and sells today. Whereas the $130 strike on the same date saw 888 contracts traded.
More trades means more liquidity, which means it’s much easier to find a buyer for your sells.

I’m sorry that your current contracts likely won’t work the best, but I do hope you consider it a valuable lesson. And I hope you stick with it. Best of luck! (Follow our trades!)
If you don’t want to spend 1-3k per contract you must be very strategic with your entries and exits.
Buy immediately on a large pull back, sell quickly on a recovery.
Study which calls that happened with today, how long it took, and how much money could have been made.

Thank you for taking the time to write all that for me. It’s good stuff! That delta sucks! I’m learning on the fly.

One question though, if NBIS goes up in the morning, would you sell my 10/17 and use the money to roll my 10/31 to a 11/21 $135?

And again. Thank you for passing along your knowledge. I just wanna write on napkins and drink beer.

quote:

---

One question though, if NBIS goes up in the morning, would you sell and roll my 10/31 to a 11/21 $135?

---

I would have no problem with the 11/21 $140.
The volume is so much higher, and it’s a bit cheaper due to a higher strike/lower delta. But not too low considering the likelihood of earnings around 10/30.

The game is all management. Welcome to the business!

Thank you so much! I shall include your name on my next napkin, and name my first born son after you.

I think I got a plan! I just need a good Thursday or Friday.

Word is ClickHouse is prepping to go IPO, what would that mean for Nebius?

quote:

---

NBIS 28% stake owned Clickhouse IPO coming soon. Clickhouse could potentially be valued at around $30–40B+ when they IPO and 28% stake in that would be 10 billion. ?? Many big companies already use Clickhouse and is reported to be way faster and competitive than $SNOW

---

More commentary

Loading Twitter/X Embed...
If tweet fails to load, click here.

How is everyone gonna navigate this? Calls on nbis or buy clickhouse