NVDA Buy and Hold vs. Options: What Happened After One Year?
In August 2025, I put $42,031 to work in Nvidia. Or, more accurately, I dedicated $42,031 to Nvidia.
I didn't actually spend all of it buying shares. I:
bought 150 shares of NVDA at $173.54 per share,
sold a covered call against 100 of those shares, and
reserved $16,000 in cash to secure a put.
Six months later, I asked a question that seemed obvious in hindsight: What if I had skipped the options entirely and simply used the whole $42,031 to buy Nvidia shares?
Same stock. Same starting date. Same amount of capital. Two very different paths.
Path A: Just Buy the Shares
On August 1, 2025, NVDA was trading at $173.54. With approximately $42,031, I could have purchased 242 shares for $41,996.68 and done absolutely nothing else.
No puts. No covered calls. No rolling. Just 242 shares of Nvidia sitting in the account.
That's our hypothetical buy-and-hold portfolio.
Path B: Put Some of the Capital to Work With Options
Instead, I bought 150 shares.
I sold one covered call against 100 of them and sold one cash-secured put. Then I kept going. Week after week, I sold or rolled puts, covered calls, or both. I collected premium and sometimes used that premium to buy additional shares.
That last part is important. Premium is cash—unless I use it to buy shares. Then it becomes compounding ownership.
So although I started with only 150 shares, my share count didn't stay at 150.
Shouldn't Buy and Hold Win When the Stock Goes Up?
That was the question that made this comparison interesting to me. NVDA had gone up.
And if one strategy started with 242 shares while the other started with only 150, the 242-share position should have a pretty substantial advantage when the stock rises.
Every $1 increase in NVDA gives the buy-and-hold position $242 in additional value.
But my original 150 shares would gain only $150. That's a $92 advantage for buy-and-hold for every dollar NVDA rises.
Options change the equation, though. While those 242 hypothetical shares were simply appreciating with the stock price, my smaller position was generating cash. And I was putting some of that cash back to work.
What I Found in February
By February 20, my original 150 shares had grown to 163 shares. My total net investment had fallen to about $20,542, because the options premium I collected reduced the amount of my own money tied up in the position as well as funding additional shares.
The position was worth approximately $30,600, giving me a total profit of about $10,058.
Now compare that with buy-and-hold. At the approximately $190 NVDA price I used for the original comparison, the hypothetical 242-share portfolio would have been worth just under $46,000. Against its original cost of about $41,997, that was a gain of roughly:
$4,000
So despite owning considerably fewer shares, my actual position had produced substantially more profit.
But Where the Profit Came From Mattered Even More
This was the part of the comparison that interested me most. With buy-and-hold, the gain came from one place: NVDA's share price went up. If NVDA gave back some of that gain the next week, some of my profit disappeared with it.
My options position was different.
Some of my gain came from appreciation in the shares I owned. But another portion came from options premium, cash I had collected along the way.
That cash had already entered the account. The stock sometimes fell, but that didn't reverse the fact that I had already collected the premium.
Of course, that doesn't mean the premium was free money. I was paid because I accepted obligations. My cash-secured puts exposed me to buying additional NVDA shares at the strike price. My covered calls gave someone else the right to buy some of my shares from me.
Income came with exposure. And that distinction is still one of the most important lessons I took from this experiment.
I Wasn't Trying to Maximize NVDA's Upside
There was a very real price for generating that income. If NVDA had exploded higher, my 242-share hypothetical buy-and-hold portfolio would have participated in every dollar of that move, but my actual position wouldn't.
Some of my shares were covered by calls. Those calls could limit my appreciation on part of my position, or cause shares to be called away.
That wasn't a flaw in the strategy. It was the trade I deliberately made. I wanted layered exposure.
Some shares could participate fully in Nvidia's upside.
Other shares could generate covered-call income.
And the cash I hadn't spent buying shares could secure puts and generate additional income.
I wouldn't describe one of those approaches as universally "better" than the other. They are different ways of putting the same capital to work. And February was only one snapshot.
So what happened next?
Six Months Later: Did It Hold Up?
This is where the experiment gets much more interesting. I kept trading. Between February and August, Nvidia moved higher, and lower, and higher again — and my options campaign kept working.
By August 14, 2026, NVDA was approximately $209.88. And my position had changed quite a bit.
My actual NVDA position on August 14
I now owned: 182 shares. (Remember, I started with 150.) So during the campaign I had added 32 shares while pursuing the options strategy, rather than simply taking the original $42,031 and buying as many shares as possible on day one.
My trade log showed:
Cumulative options premium: $11,519.00
Capital appreciation: $6,715.94
Total profit: $18,234.94
My options income hadn't replaced capital appreciation. I had both. The position had generated more than $11,500 in options premium and more than $6,700 from the shares themselves. Together: $18,234.94
Now Let's Check Buy and Hold Again
The hypothetical buy-and-hold investor still owns the same 242 shares.
Nothing has changed except NVDA's price.
At $209.88 per share: 242 shares × $209.88 = $50,790.96
The original cost was $41,996.68. That produces a gain of $8,794.28.
So here's the one-year comparison as of August 14:
Buy & Hold | My Options Strategy | |
Starting capital dedicated | ~$42,031 | ~$42,031 |
Starting shares | 242 | 150 |
Shares Aug. 14 | 242 | 182 |
Cumulative options premium | $0 | $11,519.00 |
Capital appreciation / share gains | $8,794.28 | $6,715.94 |
Total profit | $8,794.28 | $18,234.94 |
The options strategy produced about $9,441 more profit over this particular period.
That's more than twice the total profit of the hypothetical buy-and-hold position.
But I don't think the most useful conclusion is: "Options beat buy and hold."
The more useful conclusion is: During this particular year, with this particular stock and this particular sequence of trades, converting some of NVDA's volatility into options premium worked remarkably well.
And Something Else Happened
Look at the share counts again. I started at a considerable disadvantage if our only measure was ownership.
Buy and hold: 242 shares
My position: 150 shares
That's a difference of 92 shares.
By August,
my position had grown to: 182 shares
The hypothetical investor still had 242.
I still own fewer shares. But the gap has narrowed from 92 shares to 60 shares.
That's why I don't treat options premium as merely "income."
I can spend it.
I can keep it.
Or I can use it to acquire more of an asset I already wanted to own.
In this campaign, I've frequently chosen the third option.
Premium is cash—unless I use it to buy shares. Then it becomes compounding ownership.
That's how the position grows over time.
What About Today?
As I write this on August 19, NVDA is trading around $220. That means buy-and-hold has had another very good five days.
At approximately $220.27, those hypothetical 242 shares would be worth about: $53,305. Against the original $41,996.68 investment, that's a gain of roughly: $11,309.
Buy-and-hold has gained more than $2,500 just since my August 14 checkpoint.
But I can't make the same simple calculation for my actual position. Why? Because I currently have an in-the-money $210 covered call expiring August 21. NVDA is above that strike. Simply multiplying my 182 shares by today's $220 share price would pretend all 182 shares have unlimited exposure to the current market price.
They don't.
One hundred of those shares have an obligation attached to them, and right now that obligation caps their price at $210 and could potentially cost me about $1,000 in appreciation or upside.
That's another lesson from this experiment: Once options enter the picture, share price alone doesn't tell you what a position is worth.
I'll know more when this week's trade is resolved. I may allow assignment. I may roll. The stock price may move again before expiration. But I don't need to predict that outcome today. When the extrinsic value has eroded from the call, I'll respond to it.
So What Have I Learned After a Year?
I didn't start this trade campaign because I knew my Double Ferris Wheel would outperform buy-and-hold. And I still don't know what the comparison will look like another year from now.
A sustained, explosive move higher in NVDA could favor the 242-share buy-and-hold portfolio dramatically. That's exactly the environment in which covered calls can become expensive in terms of lost opportunity.
A falling or sideways market could make repeated premium collection much more valuable.
Over this particular year, NVDA moved from $173.54 to more than $200. So both strategies worked, but one worked better than the other.
Buy-and-hold worked. An investor who bought the shares and did nothing made money.
But my options-enhanced position did something different.
It turned volatility into cash.
Some of that cash became additional shares.
Those shares created additional exposure to NVDA's appreciation.
And this year, that strategy worked better than buy and hold; a lot better.
Meanwhile, I continued collecting premium. I started with 150 shares. I now own 182. I've collected $11,519 in options premium. And as of my August 14 accounting, the campaign had produced $18,234.94 in total profit, compared with approximately $8,794 for the hypothetical buy-and-hold alternative.
Same starting capital.
Same stock.
Same year.
Two very different paths.
And we're not done yet.
Comments