Samwise Quick Reference Handbook
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Sam, curious why not NVDL as well?
What about selling premium against NVDA leaps here?
We’ll deal with that later. Different time-scales, investment horizons and risk profiles. The long-term portfolio are a lot different.
We’re not selling NVDA at all ever. Maybe years from now. We don’t really close positions in the long-term portfolio. We hedge, sell premium and roll options forward. The point is to always remain long at all times in the long-term portfolios. That’s the core value in our long-term investment strategy.
Sweet thanks, QQQ just hit 80RSI on 60M
Sam, How big of a pullback are you expecting on QQQ, maybe 3-5%?
I think it’ll be closer to the 2-3% area. It really depends on how much further it runs. For example, if it peaks here, I think it holds $503-$504. So if it goes from $515 down to $503 for example, that would be 2.3%. If it reaches the high $519-$520 area, then it pulls back to $503 and we get a 3.26% pullback. I think at this point, the QQQ is likely to hold the low $500’s on a pull-back.
Agree 100%
Thanks Sam!
Sam, If I do a 513/503 vertical put spread, would you do it for this Friday or next Friday?
So first off. We’d never trade an expected downside move given the inherent asymmetry of risk. The market is almost always more likely to move higher than it is to move lower. So we never trade downside. We close out long positions. But we do’t buy puts to capitalize on an expected sell-off given the overall risk. We buy puts to hedge, but we’re deeply net long in those cases.
Second, we can’t give tailored advice on any specific trade. Just general outlook, expectations and what we’re doing here in the model portfolios.
There’s a ton of upside momentum right now and all I can really say is we won’t trade short. The market can easily blast ahead and there’s risk going to the sidelines. We sold Nvidia at $127.80 and here it is trading at $130. That’s $2.20 above where we sold. Happens ALL THE TIME.
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What can I also say is we’d never buy such a short-term option unless we were rolling options kind of like we were trying to do when we close out the May $525-$535 call-spread a few weeks back. It didn’t work. The QQQ never pulled back and rocketed ahead.
Thanks Sam. I only make trades like that as a hedge. I’m still totally long. It’s a nice way to hedge, without risking a lot.
I wonder how our boy Chris is doing atm…
Probably making money (I hope). I’m pretty sure like everyone else, he’s net long. He’s said as much. Blowing off steam and entertaining one’s worst fears is part and parcel to dealing with major corrections. That’s what I took from his commentary during the meat of the crash. But the senes I got is he was net long.
Hi Sam,
When would you consider selling premium against our QQQ 400 leaps? Is that more of a move towards the top of an intermediate rally to raise capital to hedge? Or would it be a good idea to sell premium on deeply overbought and close them out for a profit on the pullback?
Thanks!
We’d sell premium once the QQQ reaches overbought on the daily and once we feel like we’re nearing the end of an intermediate-term rally.
Everything we’re seeing now is pointing directly toward the QQQ returning to its all-time highs. So we may just wait for $540+ to sell premium and purchase new hedges.
How about our NVDL position? Are you thinking we’d selling premium on our NVDL position in tandem with selling premium on our QQQ leap position?
Yeah just like last time. So last time we sold, I believe $90 calls on NVDL.
When selling premium, we have to be very careful because we can’t afford to lose out on a big rally
That is hard to recover from
So we just have to be very confident that a top is near when we sell premium
Sam–NVDA hit 129.61 today. If it pulls back to 125-126 today are you back in?
Not sure yet. Remember, July is a very long ways away. So we have time on our side right now. We’ll need to assess the velocity of the pull-back when it finally happens.
Both QQQ and NVDA are now nearing overbought on the daily as well
It’s getting close but it takes a long time for that to resolve itself. For example, the QQQ can run another $50 after first reaching overbought on the daily. It’s a longer term resolution. Consider this. The QQQ reached oversold territory on the daily chart at $478 a share. It ultimately went down to $402 a share before all was said and done. That should give a sense of what overbought/oversold daily can be like.
Hello Sam,
Ultimately, the NVIDIA rally is quite strong, surpassing $130. Isn’t the opportunity cost significant to see NVIDIA continue at $150 without pulling back, given that NVIDIA historically increases in the run-up to earnings releases and that all the signals are positive?
What would the pullback be if NVIDIA continues its momentum at $140?
$115-120?
You say you won’t be selling NVIDIA LONG again, so you also think NVIDIA won’t see the $86-$100 zone again unless there’s a crash, and even then?
Best !
So if you look at all of our long-term portfolios, we are long Nvidia. Very long. We own options and NVDL.
Today’s trade is a short term trade in Nvidia short-term options.
As we outlined our expectation is Nvidia is going to pull back short term. Maybe it pulls back to 123.
After that, I think we’re gonna see Nvidia go to $140 to $150 a share again. It’s on its way back to its all time highs.
Any thoughts on tracking other stock like $HOOD?
How will we track the Targaryen $5K to $1M? that’s the coolest part about it.
This. Get rid of Baratheon, fine, but it would be nice to still have Targaryen for the challenge itself.
Yeah I am all for the baratheon being included in portfolio it makes more sense, Taragaryen has a very specific objective.
I wouldn’t be surprised if Sam lost taste for tracking the challenge in its individual portfolio, given the scale of the panic in the comments during our first correction lol.
Everyone was asking for updates every hour of the day on and off market hours.
I have to think about how to balance the Targaryen object with moral hazard. Here’s the problem with human nature and investing. Human beings aren’t really good at fully grasping the level of risk in a trade. That or they don’t believe it will happen to them. Airplane crashes are an abstract fear meant for other people. It won’t happen to me.
That sort of thinking can cause what should be a limited portfolio like Targaryen to become something dominate and dangerous.
The level of anxiety, fear and general angst was way way higher than it should have been in the Feb correction. The correction ended up leading to a huge windfall for all of our core portfolios. All of them made out big time in the correction. Stark is up 20% right now. Lannister is up 50%. Arryn up 130%. That should be a win overall.
But the smallest portfolios (one at 1/10th the size of our other portfolios and the other at 1/20th the size) ended up being predominate. So that’s the problem.
The Targaryen strategy can be done in the larger portfolios. Just needs to be flagged as such.
By doing it in the larger portfolios, we can accomplish our goal of highlighting the relative allocation sizes. That way when we put on a $1k trade in a $100k portfolio, everyone knows exactly the size of it all.
I’ll have to think about how to do it.
I agree Sam, mostly the only reason to see it separate is because of the end result, whether thats blown up or hits $1M. Do what you feel is best, only reason I am pushing for it is cause I feel it is fun to watch. I feel your concern, but also know that you have been very forthcoming about how much risk, how small the position should be etc.
I wonder if theirs middle ground to track the trades seperately here, as well is part of the big portfolio? I know for me, I opened a sperate account because I don’t want to muddy my main account with that.
Sam, are you expecting pullback this week?
Yeah. It should happen this week.
Are we expecting to see oversold on the hourly?
Hi Sam,
You mentioned the synthetic roll strategy in order to extend our leap time horizon (adhering to the 2-year rule) and avoid short-term capital gains tax.
Two questions.
Question #1
My understanding is that synthetic rolls is just creating a vertical call spread off of an existing long leap position and using the premium received from selling the short call leg to open a new long leap position with a later expiration date. This doesn’t cause a taxable event because there are no closing transactions. Is my understanding correct?
Question #2
What would be the criteria / trigger for us to perform a synthetic roll on our QQQ 400 leaps?
Thanks!
Question #1 — I couldn’t have said it better myself. This is exactly right and very succinctly stated.
Question #2 — so as the QQQ June 2027 $400 leaps are concerned, we are very far from getting to the point where we want to roll those forward due to time.
However, in the Arryn Portfolio, we are holding the December 2026 $430 calls, we are getting close to the point where want to roll those forward.
The way we would do it in Arryn as an example is like this. We might take a day liek today where the QQQ is deeply overbought on the hourly chart and sell the December 2026 $435 calls against our position thereby creating the December 2026 $430-$435 call-spread.
We would do this 1 contract at a time to reduce execution risk. Execution risk is the risk that we’re not able to fully execute the trade cleanly. For example, we might sell the covers calls just before the QQQ takes off making it hard to roll forward at an equivalent price.
So to reduce that risk, we would do this 1 contract at a time. Since we own 4 contracts in the December 2026 $430 calls, we might do the trade on FOUR entirely separate occasions.
Maybe today we sell 1 contract, wait for the near-term pull-back of 10-15 points and then buy 1 contract in the June 2027 or later expiration. When the QQQ rallies again and reaches overbought again, we do the same process over again. And we do it three more times to fully roll forward with limited or not execution risk.
We’re probably getting close to the point where it might make sense to roll the December 2026 expiration forward. Or at least begin the process of doing so.
Hey Sam, does signal for a big bear market still there (QQQ to 260$ ?) ?
Not really. It’s kind of gone. I mean there is still some potential. we could get a double-top at $540. But unlikely. I think at this point, the market has shown its hand. It’s signaling new all-time highs.
With the QQQ reaching 517 and NVDA reaching 131, does this change your expectations of the pullbacks? Do you think they’ll pull back more than before? Or less? Or still 5-6%?
No, it doesn’t really change anything. There’s an expectation that the market can continue higher.
When we sell positions, we very seldomly are gonna ever sell at the exact peak
We may buy at the exact bottom very often because oversold is more direct. When stocks reach oversold conditions, they almost always rebound immediately.
But when we sell positions, we will very rarely sell at the exact peak
The reason we sold at $127.80 today is because we are confident that we will see that price again in the future
Because we are confident that it will come back down to that level it makes sense to close.
Why because there is a risk that it could drop to the low 120s.
So why not sell and wait for things to play out?
That’s the general idea here
The NASDAQ 100 and Nvidia are going to sustain short term pullbacks fairly soon
The Nvidia pullback will likely get down to 125 at least maybe lower.
Most likely Nvidia will test its 123 support level on the pull back
The bullish momentum is there, and the major contracts with Saudi Arabia and the production of special chips for China have rekindled the flows! Isn’t the probability of seeing Nvidia accelerate to $140-$150 without a pullback beforehand greater? Also, the risk of seeing a minor pullback to $125-$130 at the most seems significant to me, given the strong catalyst of Nvidia’s upcoming financial statements on May 28th, which I think will have a nitro effect on the stock!
Yea, I see your point. I looked at hourly RSI behavior on Nvidia and it does seem to run. It seems to behave a bit different if the stock is rebounding than at a high, but even then it can run. This thing may rocket now and then taper into earnings.
Hi Sam,
As we would be closing out Baratheon and Targaryen accounts, may I suggest you to open an account which open trades every week and closes every other week?
Why I ask this is because not all of us have traded when Arryn/Lannister account opened, and joined late. Now it seems unclear where to enter. Sure we saw a bottom, probably one we won’t see again for a long time, last month, but wants to enter at some point.
So if you can open a newbie account that gets updated every week to boost newcomers.
Disregard this if this suggestion doesn’t make sense.
Click on the portfolio link and read about the portfolios generally. This concern is already addressed.
I can rehash it here, but I’ve already taken the time to more clearly outline a more comprehensive answer under the portfolios link
Also, if you click on the Samwise strategy link in the NAV bar, we discussed this very issue in that area of the site as well
Do you have a plan for the covered calls that were sold to create capital for hedging, like in Stark? Do you intend to buy them back during a pullback or correction, or we just ride it out?
No. It’s minor. We’re talking 1 contract. We’re not going to cover that. Remember, when we sold them, we also get the premium itself. So it’s an effective exit near $537. We received about $1700 for selling the Sep $520’s. So it’s all good. 1 contract is no big deal and it’s a good end result. We’ll buy the contract back or something close to it if we’re eventual forced to sell it.
Sam, great call outs all along. I was wondering for the next correction, are there plans to start a new portfolio? If so, will the allocation be 100k? Any plans to make a smaller one. I only ask because I’d like to open a separate account and follow every exact trade as you did in Aryn. Apologies if this has already been answered.
It doesn’t matter what Sam is doing in terms of portfolio size, if his is $100K and you want to do $10K, do 10% of each position.
Just don’t do this for Taraygarayen, I want to see it remain standalone and Sam’s inclination that people are overscaling seems to be keeping him up at night! He’s not worried about the markets, just worried about his moral responsibility! lol
On Mobile, so can’t be exact, but might be tough to do a portfolio on a much smaller scale given LEAPs are expensive options contracts. I mean if Sam is right, QQQ is going to be $700 sometime soon, so shares won’t be cheap either!
Not to discourage investing with a smaller pot, just trying to highlight practicality constraints!
Hahaha yes, the unfortunate nature of this game seems to be that the larger the portfolio size, the less risk you have to take for substantial gains, I think. (e.g. going far ITM is expensive and having a limited portfolio size will make it a bit harder). And completely agree, I feel that even I focused too much on the momentum trading portfolios mainly because there were so many posts and analysis about it that I subconsciously was drawn towards trading those positions – glad to see him pull it into the fold.
Overall, even though I had moments of doubt (driven by lack of experience and noise from other groups I follow), I feel I have learned a ton on Sam’s page.
$600 more like it. Our target is $600. $540 is the previous highs. We burst through $540, it’s a clear-cut path to $600.
I did bring up $700 as a comparison of what would happen if we followed the Covid path. The post covid rally was the equivalent of the QQQ running from $402 to $750. That was the point of the whole $700 thing. To show that we’ve seen some truly insane rallies.
But as a target, we’re looking at $600. That actually hasn’t changed even one bit during this entire correction. Our long-term outlook has always been $600 by January 2026.
NVDA is unhinged with that AH creep.
Looks like it’s going to $140 before any pullback
Looks like pullback can be more than 125$
Sam ?
Do you still expect NVDA to pull back to 125 now that it almost reached 135 today?
(As in, “Is 125 still the expected destination for the pullback?” and not “Will we still see a pullback?”)
Yes. There’s a strong chance it gets down there. So it’s more about support levels and retracement. The larger the move up, the larger the short-term pull-back.
So for example, since hte QQQ has run to around $520 – as we mentioned earlier in teh week — it now opens up a larger pull-back to $503. Whereas if it peaked at $513, it would be the same pull-back to $503 resulting in a smaller percentage drop.
So $123 is support for Nvidia. Chances are when this peaks, we get down there and bottoms where near $123-$127.
We’ll be able to buy back our spread but with the knowledge of this run. Everything is deeply overbought now. so we’ll see a pull-back (eventually lol).