TheOptionPlayer.com sets up a NVIDIA Corp. (NasdaqGS: NVDA) short-term (37-day) option strategy (based on Wednesday’s closing quoted bid/ask prices)
Investors could simultaneously:
The difference between funds received and paid out is a $.62 per share credit which we keep if the NVIDIA Corp. stock closes below $185 on Friday October 20th but immediately execute a trade adjustment if it appears the price will end up higher. If the price gaps higher open the trade using higher strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
We are basically making a technical trade on NVIDIA Corp. (NasdaqGS: NVDA). At the beginning of August the company reported blowout quarterly results. However, as confirmed in the chart below, NVIDIA stock actually crashed because investors were anticipating even better numbers. The stock price recovered but has been confined to a relatively tight trading range as the market has been very demanding of technology stocks, even for companies that posted strong quarterly results. Technical indicators are stuck on neutral and it is reasonable to expect NVIDIA to continue trading range-bound ahead quarterly earnings in a few months. NVIDIA Corp. (NasdaqGS: NVDA) stock has never, ever been above our target price and there is a strong probability that shares will be below the sold call at the October monthly option expiration date.
52-Week High: $174.56
52-Week Low: $59.51
The information presented here is for educational and informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful.