In the morning Investing Strategy Notes this morning I wrote that I would be waiting until early next week to place a trade. However the selling was much stronger than I had expected, especially considering earnings were terrific and the outlook for 2022 was raised. I think today’s selling is overdone.
NVIDIA Stock (NVDA)
Looking at the NVIDIA Stock (NVDA) chart you can see $200 is major support for the stock. It is down 29% from its high as of $245 today. The most recent low was $208.88 on Jan 24. Today’s trades are in small quantities and I plan to add more puts in if the stock falls back to $200.
NVIDIA Stock (NVDA) as of Feb 17 2022
NVIDIA Stock (NVDA)
Trade#1 Summary:
Stock: NVIDIA Stock (NVDA)
Approx Stock Price At Entry: $244.00
Expiry: Mar 4 2022
Potential Profit: $270.00
Potential Return: 3.0%
Trade Details:
Short Puts: Sold 3 put contracts for Mar 4 2022 expiry at the $195.00 put strike for an average of $1.08 = $324.00
Long Puts: Bought 3 put contracts for Mar 4 2022 expiry at the $165.00 put strike for $0.18 = ($54.00)
Spread Details: This forms a $30.00 credit put spread returning 3.0% earning $270.00 if held to expiry on Mar 4 2022
Buy To Close Early Offer: I am offering $0.45 to start and will reduce that amount as the trade moves toward expiry on Mar 4 2022
Trade Stats:
Approx Stock Price: $244.00
Approx Percent Of Protection: 20.1%
Stock Would Have To Fall To Reach Short Put: $49.00
Credit Put Spread Size: $30.00
Capital In Use: $9,000.00
Potential Profit If Held To Expiry: $270.00
Potential Return If Held To Expiry: 3.0%
Trade#2 Summary:
Stock: NVIDIA Stock (NVDA)
Approx Stock Price At Entry: $244.00
Expiry: Mar 18 2022
Potential Profit: $176.00
Potential Return: 2.5%
Trade Details:
Short Puts: Sold 2 put contracts for Mar 18 2022 expiry at the $175.00 put strike for $1.10 = $220.00
Long Puts: Bought 2 put contracts for Mar 18 2022 expiry at the $140.00 put strike for $0.22 = ($44.00)
Spread Details: This forms a $35.00 credit put spread returning 2.5% earning $176.00 if held to expiry on Mar 18 2022
Buy To Close Early Offer: I am offering $0.44 to start and will reduce that amount as the trade moves toward expiry on Mar 18 2022
Trade Stats:
Approx Stock Price: $244.00
Approx Percent Of Protection: 28.3%
Stock Would Have To Fall To Reach Short Put: $69.00
Credit Put Spread Size: $35.00
Capital In Use: $7,000.00
Potential Profit If Held To Expiry: $176.00
Potential Return If Held To Expiry: 2.5%
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. You always trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. The author assumes no liability for your investment decisions. Read the full disclaimer.