Nvidia: The Next “Never Sell” Stock?

Trade Thesis for Nvidia Corp. (NVDA):

  • Nvidia broke out to new highs recently, creating a nice opportunity for cash-secured puts.
  • The best way to learn and master the Triple Income Wheel strategy is by repetition.
  • Strike Zone is $149.00 - $173.00

Nvidia Corp. (NVDA) reports earnings this week and the shares appear to be priced for perfection. That said...there are certain stocks that you just don't sell!

Nvidia certainly falls into that category. If any company deserves a high multiple today, it's certainly Nvidia. The company has its hands (and chips) in three of the biggest growth segments in technology: Gaming, cryptocurrency, and 5G (not to mention its importance in auto/self driving!).

In fact, it's a stock that you should probably ADD to your position on any meaningful pullback. Buy the dip through cash-secured puts!

Trade Analysis (Click the video below)

Cash-Secured Put Analysis

Risk/Reward Analysis

Based on your personal risk tolerance, consider the following cash-secured put options with various risk/reward profiles

Aggressive Portfolio

(target monthly yield = 1.5%-3.0%)

NVDA Sept 17th $185.00 Put

Price (Premium):  ~$3.65

Delta:  24

AMY%:  1.9%

MoS %:  7.3%

Base Portfolio

(target monthly yield = 1.0%-1.5%)

NVDA Sept 17th $175.00 Put

Price (Premium):  ~$1.81

Delta:  13

AMY%:  1.0%

MoS %:  12.3%

Conservative Portfolio

(target monthly yield = 0.5%-1.0%)

NVDA Sept 17th $170.00 Put

Price (Premium):  ~$1.26

Delta:  10

AMY%:  0.7%

MoS %:  14.8%

AMY % = Average Monthly Yield % / MoS % = Margin-of-Safety %

DISCLAIMER: Parsimony Investment Research and/or it's affiliates may or may not have a position in the stocks and/or options mentioned in this post at the time of publication. The information contained within this post is for informational and educational purposes only and it is not intended as a recommendation of the securities highlighted or any particular investment strategy; nor should it be considered a solicitation to buy or sell any security. The strategies and securities mentioned in this post may not be suitable for all types of investors and the information contained in this report does not constitute advice. Past performance is not a guarantee of future results. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker.