Did you forget that NVIDIA (NVDA) reports a couple of weeks after other big guys? This Wednesday, August 27, the King-Acccue of Artificial Intelligence, consisting of almost twelfth of the total S&P 500 index ($ SPX), and about 10% Nasdaq-100 ($ IUXX) -Ki bats.
Based on how the market looks stretched, stocks can be vulnerable. If not immediately after this week’s announcement, then by September, when Hamptons empty and offices are filled all over the country “How was your summer?” The chatter.
The NVD report this quarter is available at a time when some Wall Street doubts how long the investors will be patient. Not with NVDA driving on the market, life -changing chips. The company passes from the challenges of vitality, leadership market and competition. Most of this is in the rear -view mirror. However, the interrupted concern for China’s competition. And more recently, there are restrictions that may arise from the NVDA relations with the US government, which seem to be to create their own index fund, one shares at the same time.
But the biggest obstacle for the NVDA is this time an old problem that tends to creep when the stock becomes so large, so powerful and so closely observed that it becomes the mood of the whole market. Let’s face it, if you own an index fund, NVDA is the biggest package of your shares. And if you do not, you probably have it in a different form.
I’ll finish below my collar analysis, but that’s just one of the four ways to play the other side of NVIDIA’s income. It has nothing to do with the actual numbers. Now everything is related to the vibe of these shares. Increasing concern that all AI chips in the world will not be a long -term situation if buyers of those chips take a long time to get money from those chips investments.
It was the story of the Dot-com bubble. The Internet was a real deal. However, it was thought that this would provide quick profits for those who pay for it. It took a few years longer, and it crushed the market. Now it is a risk with NVDA. The profit must meet expectations.
NVDA is one of many stocks that now contains “reverse” ETFs. These funds usually use derivatives such as three to show here.
If the goal is to just have a position that moves in the opposite direction of NVDA in stock, Direxion NVDA Bear -1x ETF (NVDD) seeks to provide exactly that. Like most of the reverse and levers, the NVDD is designed to one day a reverse exposure. Thus, mathematics of investment and the ratio of reverse and leverage ETFs can work against investors over time. So they should be used for trade, not long -term investment.
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For those who are not satisfied with the attempt to crush it in the NVDA falls and only get a mirror image of daily movement, Tradr 1.5x short NVDA Day ETF (NVD) and Graniteshares 2x short NVDA Day ETF (NVD) take this reverse idea further.
These are relatively small ETFs, which is another risk to monitor and explore. The spread on them are not as strict as the NVDA’s own stock. And that leads me to the other two ways that I emphasize here for the NVDA bears.
They both include opportunities. However, the first NVDA needs to buy only one option. There is no need to keep the shares, as it is assumed that you want to benefit from a decrease in Nvidia.
Here’s what a Put option may look like when Monday’s market is close. I have chosen a close shelf life because the idea is to take advantage of a huge decrease in earnings. These are volatile because the stock is. This means that the purchase options can be expensive, although below the IV rating indicates that the NVDA is at the bottom of 28% of its 12 -month volatility range. So, relatively cheap.
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$ 445 was paid to the owner the right to sell the $ 100 shares of the NVDA for $ 170 until the day of the shelf life. Thus, in order to earn a clear profit, the shares must definitely decrease to less than $ 166. However, if this happened this week, immediately after Wednesday’s announcement, it may allow the Put Option holder to earn a profit when the shares will actually decrease to that level. Transactions for such stocks are more related to trying to make a profit from volatility, which is accompanied by a sudden change in circumstances. As a hurry to leave stock.
And since I’m a guy who likes a good collar when I see it, here’s how this strategy can work when you have a volatile reserves associated with income.
The example below shall indicate $ 180 until the same 9/19/25 expiry date as above. However, I also write an encompassed call only the same date and get all upside down to $ 228. So the cost of my choice transaction is essentially my price. And upside down? 22%, five times larger than a negative thing.
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NVDA is like its own Wall Street casino. There are so many ways to try to benefit from it, except that you are buying and holding it. And since it is suddenly falling and disregarding, there is not something all investors want to do, it helps to know that you owns or not, you can make a profit when the NVDA is not only falling when the price increases.
On the day of the publication, Rob Isbitts had no (directly or indirectly) positions in none of the securities mentioned in this article. All information and data in this article are only for information purposes. This article was originally published in barchart.com
