NVDA Analysis

NVIDIA Corp. (NVDA)

Update 7/1/2019: NVDA rose steadily from the day I entered my short iron condor position. A news-storm involving the trade dispute with China pushed the position beyond it’s profit zone, and I exited for a loss. The debit required to close the position was $4.89, which is a $3.08 loss from the $1.81 credit upon entry. Altogether the share price rose by $23.26 during my holding period. The implied volatility rank fell by 11.5 points to 20.9%.

The exit was triggered under my new 2019 trading rules, which requires immediate exit if a position moves beyond the profit zone with less than 21 days until expiration.

Shares rose by 15.9% over 24 days, or a +242% annual rate. The options position produced a -63.0% loss for a -958% annual rate.


I have entered a short iron condor spread on NVDA, using options that trade for the last time 42 days hence, on July 19. The premium is a $1.81 credit and the stock at the time of entry was priced at $146.24.

The profit zone for this position is between $166.81 on the upside and $116.81 on the downside.

The implied volatility rank (IVR) stands at 32.4%.

Premium: $1.81 Expire OTM
NVDA-iron condor Strike Odds Delta
Long 175.00 93.0% 6
Break-even 166.81 89.5% 10.5
Short 165.00 86.0% 15
Puts
Short 125.00 84.0% 13
Break-even 116.81 88.5% 9.5
Long 115.00 93.0% 6

The premium is 18.1% of the width of the position’s wings.

The risk/reward ratio is 4.5:1.

By Tim Bovee, Portland, Oregon, June 7, 2019

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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Based on a work at www.timbovee.com.

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