Bull or Bust

a bull's view

NVIDIA-YOU HAD ME AT GAMING

ENOUGH IS ENOUGH NVIDIA!

Unfortunately, we could not get stock quote nvda this time.

I’ll be honest with everyone and admit I could not resist selling my remaining JUNE 100 CALL this afternoon. I cashed out with a nice 551% gain. That’s not a typo I assure you. If you think you cannot make more than 4% in the market you’re wrong.

Now, why did I sell? I’m sure that’s the big question right? Keep in mind I still own a JAN 90 CALL that’s up 176% so I’m not out of NVDA completely. I just have enough experience to know when to fold’em. It is very easy to get caught up in the momentum and convince yourself that a stock is just going to keep going up. Sometimes they do and I’m sure this will be one of those times, but the risk, currently, is to the downside.

PATIENCE

Therefore, I will continue to hold the JAN 90 CALL and call the shares as soon as I have the funds (early or not I want them). I will wait patiently and hope NVDA pull’s back into the mid to lower 120’s. Maybe it’s wishful thinking, I understand that, but 551% is not something you don’t capture.

MY THOUGHT PROCESS

My thought process was simple: let’s say I called the JUNE 100 tomorrow and held the 100 shares with a cost basis of $100 per share. I would be up $34.00 per share as of right now (roughly) or $3,400.00. My profit on this call was indeed $3,400.00 right now. Today. Without waiting or calling the shares.

To call the shares I would have to come up with $10,000.00 by the third Friday in June (expiration day for the option). I have the money, but don’t want to dip into that pot just yet. To make another $3,400.00 NVDA would have to move on to $165.00 per share which happens to be the new price target Goldman Sach’s issued this morning.

Sure, I believe without a doubt, that NVDA will be $165.00 per share within the next twelve months. Will it get there by June? Probably not (who knows). Is it more likely we have a market down day and a minor selloff in NVDA? I, again, believe yes is the answer. It probably won’t be a large selloff and it might be so fast you could miss it if you’re eating lunch, but it could still happen and when it does I will be ready to double-down on the JAN 90 CALL!

PROPER PORTFOLIO ALLOCATION

Also, keep in mind, I owned 300 shares (or three) worth of options on NVDA which would have cost $29,000.00 to call. My portfolio currently doesn’t equal that much. I planned on transferring funds into the portfolio to call the shares, but the balance at that point would be $60,000.00 and HALF would have been NVDA.

I do not like having any one holding totaling more than 5% of my portfolio. Currently, I am overweight several including Intel Unfortunately, we could not get stock quote intc this time. and GE Unfortunately, we could not get stock quote ge this time.. The thought of half being in NVDA was just a little too much for me to swallow for the year. This was also a deciding factor in my decision to cash out of the JUNE call’s completely.

I am 100% confident I will regret selling the two JUNE call’s…I am well aware of this fact.

 

Stock and Option Trading