When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (NVDA) – Expiration
EXPIRATION of the NVIDIA (NVDA) February 2025 $90-$95 in-the-money vertical Bull Call debit spread at $5.00 or best
Closing Trade
2-21-2025
expiration date: February 21, 2025
Portfolio weighting: 10% weighting
Number of Contracts = 25 contracts
I am sending this trade alert out early so I don’t overwhelm you with too many alerts at the close later today.
Since I sent out this trade alert on January 28, Nvidia shares have risen a ballistic $43.85, or 47% above the nearest strike price. My bet that the euphoria would continue into inauguration day proved correct. Just remember that this position does not expire until after the close today at 4:15 PM EST.
As a result, you get to take home $1,500 or 13.64% in 18 days.
Well done and on to the next trade!
You don’t have to do anything with this expiration.
Your broker will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning February 24 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock-solid balance sheets.
NVIDIA is so far ahead of the competition that no one will catch up for years. What the (NVDA) bears don’t get is that the company has a moat so wide it is impossible to cross. Their enormous lead in software is the result of crucial platform decisions made 20 years ago. The key staff are all looked up with ultra-cheap equity options with strike prices around $1-$2.
Virtually everyone has now raised their upside targets for the stock over $1,000/share. That’s because, with a price-earnings multiple of 30X, it is still the biggest Big Tech stock in the market. By comparison, its biggest customers, (META) is at 34X, AI Leader (MSFT) is at 38X, and (AMZN) is at 63X. Efforts by Alphabet to break into the AI chip business are feeble at best.
Every 15% correction in (NVDA) over the last two years has been a strong “BUY”. It owns the AI manufacturing business. It’s looking at $250-$500 BILLION in sales growth per year over the next several years.
Santa Clara-based NVIDIA designs and manufactures high-end, top-performing graphics cards or GPUs. There is probably one in your PC. They are essential in the artificial intelligence, automobile, PC, supercomputing, cybersecurity, and gaming industries.
They are also crucial for national defense. The Biden administration recently banned NVIDIA from exporting high-end chips and their manufacturing equipment to China, which they were using them to build sophisticated weapons to use against us. This revenue loss is what has taken the shares down to their current low levels, down 65% in six months.
NVIDIA has long been one of the fastest-growing US companies. Since 2005, its annual net income has soared from $89 million to $9.7 billion.
If the highest growth sectors in the economy are Robotics, AI, and energy storage, (NVDA) is in the sweet spot of every one of these.
And before you ask, NVIDIA is an abbreviation for the Latin word for “envy.”
To learn more about the company, please visit their website at https://www.nvidia.com/en-us/
This was a bet that NVIDIA would not fall below $95 by the February 21 option expiration in 18 trading days.
Here is the specific accounting you need to exit this position:
Expiration of 25 February 2025 (NVDA) $90 calls at………….………..$48.85
Expiration of 25 short February 2025 (NVDA) $95 calls at……………$43.85
Net Proceeds:………………………….………..………..................................…$5.00
Profit: $5.00 - $4.40 = $0.60
(25 X 100 X $0.60) = $1,500 or 13.64% in 18 days.
