Trade Alert - (NVDA) February 27, 2025

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) – BUY

BUY the NVIDIA (NVDA) March 2025 $150-$155 in-the-money vertical Bear Put debit spread at $4.35 or best

Opening Trade

2-27-2025

expiration date: March 21, 2025

Number of Contracts = 25 contracts

The good news is in the price.

Markets brimming with confidence see earnings multiples expand. Markets wrought with fear and uncertainty trade at discounts. Whether that is a 10%, 20%, or 50% discount is anyone’s guess. But it is certainly not 5%, which is where we are now.

Nvidia just announced blockbuster earnings that are better than the most optimistic expectations. Even the most optimistic expectations. The company forecasted higher first-quarter revenue, signaling continued strong demand for artificial intelligence chips, and said orders for its new Blackwell semiconductors were "amazing."

The forecast helps allay doubts around a slowdown in spending on its hardware that emerged last month, following DeepSeek's claims that it had developed AI models rivaling Western counterparts at a fraction of their cost.

Nvidia's outlook for gross margin in the current quarter was slightly lower than expected, though, as the company's Blackwell chip ramp-up weighs on Nvidia's profit. Nvidia forecasted that first-quarter gross margins will sink to 71%, below the 72.2% forecast by Wall Street, according to data compiled by LSEG.

However, the shares rallied only 3%, far less than the 10% anticipated by the options market. This is not good. I am therefore willing to bet that (NVDA) is not going to a new all-time high in the next 16 trading days. And with implied volatility at a sky-high 64%, I will be paid amply to do so.

I believe that big tech may rally from here for a few days, then roll over once again. The macroeconomic background is going from bad to worse.

I am therefore buying the NVIDIA (NVDA) March 2025 $150-$155 in-the-money vertical Bear Put debit spread at $4.35 or best.

Don’t pay more than $4.60, or you’ll be chasing on a risk/reward basis.

Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.

If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $4.35, $4.40, $4.45, $4.50, $4.55 and $4.60. You should get done on some or all of these.

(NVDA) is the most over-owned stock in the market. It is the largest position held by virtually all of my followers, largely through capital appreciation. If investors are going to de-risk in the face of today’s unprecedented uncertainty, this is the first name they will hit. This is why the share price has remained virtually unchanged for nine months.

Santa Clara-based NVIDIA designs and manufactures high-end, top-performing graphics cards or GPUs. There is probably one on your PC. They are essential in the artificial intelligence, automobile, PC, supercomputing, cybersecurity, and gaming industries.

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 is a bet that NVIDIA will not rise above $150 by the March 21 option expiration in 16 trading days.

Here are the specific trades you need to execute this position:

Buy 25 March 2025 (NVDA) $155 puts at………….………$28.00

Sell short 25 March 2025 (NVDA) $150 puts at…………$23.65

Net Cost:………………………….………..……...........…….…....$4.35

Potential Profit: $5.00 - $4.35 = $0.65

(25 X 100 X $0.65) = $1,625 or 13.64% in 16 days.

To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.

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.

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