Guy Math: Intermediate Trading Strategy
As promised, sharing my Custom Strategy to whip my idle cash due to the recent covered calls got assigned. Not for beginners so please be prewarned and note the disclaimer for all investments.
I’m looking at constructing another strategy for EOY while don’t mind holding stocks for long such as $Tesla (TSLA.US)$ , $Apple (AAPL.US)$ & $Alphabet-C (GOOG.US)$ thus I’ve used $NVIDIA (NVDA.US)$ as my example.
For quick reference I’ve added the different positions and data as my examples will consist of them.
Worst case scenario that I always advocate for planning. Using my GuyMath. ![]()
Strangle Strategy:
NVIDIA stock drops below 138.
Your naked PUT will buy 100 NVDIA at 138 = 13,800 less premium obtained 2,305. You’ll own NVDIA at a cheaper price than now, each stock at 114.95 than the current price 137.6. That’s a stock I won’t mind holding at that price.
If NVIDIA goes above 140. That’s when you’ll be assigned and incur huge loss when the difference is above the premium of 2,305.
Strangle Strategy:
NVIDIA stock drops below 138.
Your naked PUT will buy 100 NVDIA at 138 = 13,800 less premium obtained 2,305. You’ll own NVDIA at a cheaper price than now, each stock at 114.95 than the current price 137.6. That’s a stock I won’t mind holding at that price.
If NVIDIA goes above 140. That’s when you’ll be assigned and incur huge loss when the difference is above the premium of 2,305.
Worst case scenario that I always advocate for planning. Using my GuyMath ![]()
.
Custom Strategy (Strangle + Owning Stocks)
NVIDIA stock drops below 138.
Your naked PUT will buy 100 NVDIA at 138 = 13,800 less premium obtained 2,305. You’ll own NVDIA at a cheaper price than now, each stock at 114.95 than the current price 137.6. That’s a stock I won’t mind holding at that price.
As we simulated buying stock now say 137.6. Our stock will incur paper loss. However as it’s NVDIA it’s a stock I’m already willing to hold long. So no issues on that front. Added with the above strangle. My stock will cost less which is (114.95+137.60 =252.55/2=126.275) That’s almost the same price of my Nvdia stock that got assigned recently.
Now for the other big difference due to the stocks on hand.
If NVIDIA goes above 140. Treat it as 1. covered call with a max profit of 1368 (premium gained). 2. Naked put with premium earned 1130. That’s (1368+1130=2,498).
Between today till 20th Dec. If market goes above 140. We pocket $2,498 that’s on average 1k per month as it’s mid Oct now.
If market goes below 138. We will just be proud owners of Nvdia with 200 stocks at a price of 126.3 each.
Do you agree with my math? Give me a 👍❤️
Custom Strategy (Strangle + Owning Stocks)
NVIDIA stock drops below 138.
Your naked PUT will buy 100 NVDIA at 138 = 13,800 less premium obtained 2,305. You’ll own NVDIA at a cheaper price than now, each stock at 114.95 than the current price 137.6. That’s a stock I won’t mind holding at that price.
As we simulated buying stock now say 137.6. Our stock will incur paper loss. However as it’s NVDIA it’s a stock I’m already willing to hold long. So no issues on that front. Added with the above strangle. My stock will cost less which is (114.95+137.60 =252.55/2=126.275) That’s almost the same price of my Nvdia stock that got assigned recently.
Now for the other big difference due to the stocks on hand.
If NVIDIA goes above 140. Treat it as 1. covered call with a max profit of 1368 (premium gained). 2. Naked put with premium earned 1130. That’s (1368+1130=2,498).
Between today till 20th Dec. If market goes above 140. We pocket $2,498 that’s on average 1k per month as it’s mid Oct now.
If market goes below 138. We will just be proud owners of Nvdia with 200 stocks at a price of 126.3 each.
Do you agree with my math? Give me a 👍❤️
Anyone want to help calculate the ROI with initial capital of 100 $NVIDIA (NVDA.US)$ shares and Dec 20. Comment below.
Disclaimer: Investment involves risks and the potential to lose principal. It is not suitable for everyone, and users will have to make their own individual investments decisions.
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2024H1 Moomoo Alchemist
Investing casually and learning as I go.
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pootpoot : I was strangling nvda until it broke out.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
CasualInvestor OP pootpoot : Would my custom strategy work? I’m happy for 1k per month.
pootpoot CasualInvestor OP : yes if u dont mind owning them at 115. but i would probably shift my covered call radius further if its EOY. blackwell seemed to have a higher probablity of breaking new highs. o well but as we know, the higher it climbs, the bigger the next correction.
pootpoot pootpoot : PS: im very patient when it comes to buying. so its a different strategy
CasualInvestor OP pootpoot : Agree. Was thinking of layering it. With another strategy. Only sharing some as I’m sharing the rest free on my channel too.
CasualInvestor OP pootpoot : Agree. Was for illustration. Will also choose OTM options. Don’t wanna risk early assignment like what happened to my Apple previously.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
CasualInvestor OP pootpoot : When it broke out I was thinking. To enter now or wait. But looking at the fundamentals. I rather hold now than miss out. Later FOMO.
pootpoot : now its about 1 month away from NVDA earnings. i think that there should be some pullbacks before gaining momentum to near or 140 during ER as a potential breakout point. quite overbought now..![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
previously i did shared my nvda strategy too.. i always do wheel puts&cc, NVDL & NVDA altogether. sometimes long spreads with weekly/bi week premiums. by far nvda is still my top performer for this year. but i have slowed down my actions lately as i felt its quite high right now.
CasualInvestor OP pootpoot : I need you on my channel.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
pootpoot CasualInvestor OP : happened to my sofi lately . i bought 1 and half week ago. placed a cc that was about 30% gain away. which i felt it was unlikely. and it hit yesterday already. fml..
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