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Strategies & Market Trends : Trader J's Inner Circle
NVDA 198.57-4.1%3:59 PM EST
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From: Trader J8/20/2024 9:56:11 AM
2 Recommendations

Recommended By
Sonali
Zen Dollar Round

   of 56532
 
TRADE: Out the last 1/3 position of my NVDA 12/24 $105 Call position at $31.75. Given the recent strength and expectations, it could be a mistake to go flat with this trading position but I'll dry my tears on the more than a 100% gains since I took the position at $15.80 when the stock was trading in the high $90s. In my view, the premium for those $105 calls was reasonable considering the upside catalysts.

In the end, my gut is screaming at me to remember the reason for the trade and that I'm already overweight the shares on the long side. I took the trade because I wanted to capture two quarterly EPS releases (hence the 12/24 dates) but also recognizing that the stock was down nearly 30% in short order. In short, it was one of my phoenix trades, stocks that get badly burned but have what it takes to rise from the ashes quickly.

Without question NVDA is going to report great numbers, but that doesn't mean the stock is going higher. All it will take is any impact on guidance from competition, Blackwell delay, election or end-of/beginning year expense mitigation from customers and we could revisit the $100 level quickly.

...in which case, I'll likely be making a similar trade again. And that's much easier to do after going flat with this one and taking the profits.
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