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) – TAKE PROFITS
SELL the NVIDIA (NVDA) November 2023 $370-$380 in-the-money vertical Bull Call debit spread at $9.98 or best
Closing Trade
11-7-2023
expiration date: November 17, 2023
Number of Contracts = 11 contracts
We are at max profit with our NVIDIA position and the risk/reward of continuing is no longer favorable. It is not worth two cents to carry eight more trading days of risk.
Better to raise cash here with which you can take action on the next dip. (NVDA) shares are now 21.27% above the nearest strike price. That’s what happens when you catch a $41 move in the stock in a week.
I am therefore selling the NVIDIA (NVDA) November 2023 $370-$380 in-the-money vertical Bull Call debit spread at $9.98 or best.
As a result, you get to take home $1,408 or 14.71% in 14 days. Well done and on to the next trade.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
Analysts always make projections based on extrapolating current demand. What they don’t take into account is the fact that NVIDIA’s products are being designed into new products at an incredible rate.
As a result, every portfolio manager has to own (NVDA) or risk getting fired, unless they run a value fund. I fully expect to see $1,000 a share in the next year.
It’s also hard to imagine NVIDIA’s stock not going ballistic when Tesla’s EV production is rocketing from 1 million to 20 million in ten years.
But that’s just me.
I’m always looking at the ten-year view. I have been doing so since 1970. It pays big time.
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 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. Its NVIDIA Titan V graphics processing unit used for supercomputing architecture sells for an eye-popping $2,999. It is the one stock every portfolio wants to buy on the dip.
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 $380 by the November 17 option expiration in 14 trading days.
Here are the specific trades you need to exit this position:
Sell 11 November (NVDA) 2023 $370 calls at………….……........…$82.00
Buy to cover short 11 November 2023 (NVDA) $380 calls at….…$72.02
Net Proceeds:……………...…………….………..…………................….....$9.98
Profit: $9.98 - $8.70 = $1.28
(11 X 100 X $1.28) = $1,408 or 14.71% in 14 days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
