Options Playbook Ep. 461 — Exploring #TGT And #NVDA
This episode of Options Guy TV opens on a genuinely good day across the market, with Target’s earnings blowing past expectations, including the notable detail that the company was actually receiving money back related to tariff policy, a real tailwind that helped drive a strong initial pop despite an odd, brief head-fake lower right after the report first crossed. Brian Overby also touches on a Treasury announcement about buybacks of longer-dated bonds, using it as a jumping-off point for a broader, candidly opinionated aside about fiscal policy during periods of economic strength, before circling back to the actual trading opportunities the day presented.
The main event is closing out the Target open wing butterfly from the prior session, and Brian walks through the position with real satisfaction, noting that the trade had roughly doubled from its original 90-cent cost to a $2 exit value even before the stock had fully reached the butterfly’s ideal 162.50 middle strike. He’s explicit about his exit philosophy here, that when a trade built around a specific earnings catalyst has already captured a strong gain relative to its maximum potential payout, taking profits rather than holding out for the last dollar of theoretical upside is usually the better move, especially with only a couple of trading days left before expiration and time decay working hard against the short middle strikes.
A genuinely fun, unscripted moment comes when Brian pivots to Walmart, which was reporting the following morning, and builds a bonus open wing butterfly live on air in real time, working through strike selection out loud, adjusting from a three-point-wide structure to a five-point-wide one to get better upside exposure, and landing on buying the 118 strike, selling two 123 strikes, and buying one 126 strike for just over a dollar. He frames the trade explicitly as secondary to his stronger conviction in Target, noting Walmart’s persistently higher valuation multiple makes it a tougher stock to build a strong directional case around even when the broader retail sector backdrop looks constructive.
The episode’s most technically rich segment covers a diagonal call spread Brian builds on Nvidia ahead of its earnings report the following Wednesday, and it’s a genuinely useful lesson in how to use a stock’s unusual expiration calendar to a trader’s advantage. Because Nvidia offers multiple weekly expirations with meaningfully different implied volatility levels, a shorter-dated contract trading around 29% implied volatility and a longer-dated one spanning the earnings date trading near 49%, Brian sells the nearer-term, cheaper-volatility call and buys the further-dated, earnings-inclusive call against it, lowering his net cost relative to simply buying the long call outright while preserving the ability to roll into a traditional vertical spread once the short leg expires.
What makes this Nvidia trade worth paying close attention to is how explicitly Brian frames it as an active, hands-on position rather than a set-and-forget structure, noting that if the short-dated option expires worthless as planned, he intends to come back the following session and sell another call against his remaining long position, deliberately choosing a further out-of-the-money strike to preserve more upside room as expiration and the earnings catalyst both approach. It’s a clear illustration of how a diagonal spread functions less as a single static trade and more as an evolving campaign that a trader actively manages leg by leg through an earnings cycle.
