Option Plays for – NVDA
The trades below are for educational purposes only.
They are not recommendations to purchase any particular stock or options contract.
Note: they are suggested entry and exit points! disclaimer
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Stock Information Updated 8/16/18 |
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Company Name:NVIDIA Corp Stock ticker symbol: NVDA Current Price: $257.44 Change: -1.64 (-0.63%)
After Hours: 245.55 -11.89 (-4.62%)
Weekly IV%: 123.52% MMM +/- 16.10
52-week high: $269.20 52-week low: $157.37
Stats since last update:
Institutional 63.81% - SAME Float - 127.32M - SAME Short Interest - 37.29M - SAME Market Cap - 60.64B SAME
Earnings: 8/16/18 After |
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Trade Bias: Cautiously Bullish |
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Trade Type: Lotto Calls/Puts
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8/16/18 - NVDA beats but guides lower which is a deal killer for big funds; and also reports a slump in cryptocurrency mining chip sales that caused a dumping of the stock in after hours; however, this stock could easily ERASE all the beating it took; and climb much higher since tomorrow is monthly expiration.
The CALLS and Spreads I posted are definitely not going to work out, but there is still an opportunity to hook a White Whale tomorrow! I will also be rolling out my spreads into the future as I firmly believe this stock is going a lot higher in their future, so I will be collecting rent on the trip higher to pay back on the earnings plays that did not work out.
What strike should you fish at? Well, as you know, I believe when price shows Fibonacci numbers, that is "code" for insiders; and NVDA showed us TWO in the closing prices tonight.
I know it seems like a superstition I have, but in my 20+ years of trading experience and analysis, I have found this to be significant in helping me pinpoint price movement.
That being said, I am looking at fishing in the $255 Calls tomorrow morning; which is also just under the top SGB zone that the stock sold off from their last earnings quarter.
If investors decide to continue taking profits, the downside could easily be the 200MA on the daily chart around $235.00 which should bring the Bear Call Spread I posted into a profit zone.
Otherwise, I will be selling premium spreads in the direction of momentum and SGB breaks going forward.
=============================================================================================================================== 8/15/18 - Tomorrow is the big day for NVDA investors to find out if the popular tech company can once again beat earnings estimates. It is expected the company will report adjusted ESP of $1.83 on revenue of $3.1 billions. For the same quarter last year they reported adjusted EPS of $1.01 on revenue of $2.23 billion.
Over the past couple of years the stock has been a rocket ride for early investors who held on, but in the past couple of quarters, the stock has floundered; trading sideways for the most part; indicating BIG money has had their fill; and is likely sticking around to collect the dividend. The question is, can the company keep innovating in their space with new technology that will create even more demand? Hard question to answer because technology is ever changing and there is always competition at the door looking to grab their share of the pie that NVDA has been eating most of for a long time.
On Monday, CEO Jensen Huang unveiled their new Turing architecture (GPU) processors saying there would be "spectacular surprises" at its GeForce event on August 20 at the gaming expo: Gamescom. Will they reveal new consumer products with this tech that can cause a massive upgrade cycle? There are so many industries that already use their (GPUs) that could be putting the company at a saturation point—which would explain the sideways trading action; however, a new infusion of consumer tech would most likely spark another breakout rally in the stock—unless it's considered a patch job, then we could get a nice drop back to the 200MA or lower on a disappointment.
The current trend is still bullish, but when tech companies disappoint, they tend to get whacked; and with IV currently at 94% all the option strikes are going to be expensive. The current MMM is +/- 14.96, so if you are looking for CALL plays, then choose strikes inside a 1.5x move, and for PUT plays, you can go up to 15% OTM.
The company primarily has ONE-READY-PLAYER in the visionary genius of CEO Jensen Huang who has led the pack in AI development and graphics (GPU) control. All the Tech companies like: AAPL, FB, GOOGL etc. use NVDA chips; which seals the demand; and practically guarantees upgrade cycles with each new generation of tech they come out with—the questions is can he continue the buzz and lead his company into the 23rd century?
The stock looks ready for another move in either direction, so we can look for Lotto Trade opportunities going forward no matter what direction the stocks takes post earnings because they are the GIANT in the sector and the bigger they are the harder than can fall.
There have been multiple price targets into the $300's and as low as $120, so the appetite for movement is there...we just need to keep fishing for those opportunities to hook on to a Moby Dick White Whale Lotto Trade!
With IV pumped up, the OTM Lotto Trade options are going to be expensive, so either you pay up or do spreads to cut the cost down.
MMM:
IV:
Bias is long
Big bets are spreads
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