Papertrading Competition | Who won the NVDA shares and how did they do that?

Moomoo AU wrote a column · Oct 16 05:15

It's always good to see you here. We just said goodbye to the third season of Papertrading Compeition in Moomoo AU, and then here comes the moomoo GLOBAL Papertrading Competition.

Let's congratulate to @Persona888, the champion of US stocks papertrading competition, and @上海白砂糖, the champion of AU stocks papertrading competition! They grabbed the reward of 10 $NVIDIA (NVDA.US)$ shares for their excellent performance.

If you want to know more about how they won the first place in the competition with more than 3,000 registors, dive in now!

Mooer's Stories

Mooer's Stories | Taking care of my family, so does my portfolio

@NoNo444: Short selling isn't for everyone...... Respect that the market sometimes does it's own thing, and to not be greedy. Take profits when you can.

Mooer's Stories | Be friends with the market volatility

@Persona888: Of course, high returns come with high risks. But if we want to survive through the volatility in the longer term, we need to adjust our size and trade responsibly. This is by staying invested for the long term and following asset allocation, one can ride out short term fluctuations and benefit from overall market growth.

Mooer's Stories | Trading as a mirror, reflecting yourself

@上海白砂糖: I believe that the process of finding one's personal investment style is also a process of knowing oneself better. Ultimately, the investment style should be unified with one's personality, character, thoughts, and understanding of the world and the market. This process is quite challenging.

Mooer's Stories | Catch the trend and discipline yourself

@满山猴我腚最红: when buying, don't go all in at once; manage your position and buy in batches, without the pursuit of buying at the lowest point. Stock-trading is not an exact science; grasping the trend is already quite an achievement.

Trading analysis

>US market

>>Only Buying $NVIDIA (NVDA.US)$

One investor who ranked among the top three for weekly returns had a particularly typical trading strategy, purchasing only Nvidia stock and executing multiple options trades. This contestant bought call options with strike prices of $120 and $115 on September 23. This investor had also made several purchases of Nvidia call options starting last week and then closed these options on September 24.

This investor's strategy is a classic approach of betting on a rise in stock prices by buying call options. Nvidia's stock has indeed been performing strongly recently, with a tremendous volume of options trading and a bullish sentiment prevailing in the market regarding Nvidia. The investor chose to buy call options with multiple strike prices, possibly to diversify risk or to anticipate price increases at different levels. This strategy allows for potential profits at various price points, but it also means paying higher option premiums.

Then, the investor quickly closed their positions in the short term, possibly based on a judgment of market volatility or having reached their expected profit target. Rapid buying and selling in the short term can reduce the time value decay of holding options but may also lead to missing out on subsequent significant price increases.The risk of this strategy lies in the possibility that if the stock price does not rise as expected or declines, the investor may lose the entire premium paid for the options. Additionally, options trading generally involves higher leverage, which amplifies both potential gains and risks.

>>Chinese Concept Stocks Finally Reach a Turning Point

We also noticed an interesting trade from another investor who began betting on Chinese assets in the first week of September. This investor purchased the 3x Long FTSE China ETF - Direxion and forward call options for Alibaba (expiring on November 15, with a strike price of $90).

The introduction of several positive monetary and fiscal policies in China exceeded market expectations, significantly boosting investor interest in Chinese assets. As a result, Chinese assets experienced a rapid rebound, with the NASDAQ Golden Dragon Index rising by 24% last week, and $Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$ showing an astonishing 60% change over five days. (Investors can find a list of these assets in the ETF sector.)This investor's strategy reflects an accurate forecast of market trends and a keen sensitivity to policy developments. By choosing to go long on Chinese assets in early September, the investor likely had high confidence in a shift in Federal Reserve policy and subsequent supportive economic policies in China. The choice of the $Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)$ - Direxion Daily FTSE China Bull 3X Shares ETF is a leveraged strategy that can significantly amplify investment returns during market rebounds.

Despite experiencing setbacks in stock prices during the first week of purchase, the investor held onto the position, and this holding strategy has proven successful during the market rebound. This indicates a strong risk tolerance and confidence in the judgment of market trends on the part of the investor.

>ASX market

In the last few days of the competition, investor sentiment has improved as inflation in the United States has been controlled and the Federal Reserve has lowered interest rates by 0.50%. Hopes are now rising that the Reserve Bank of Australia will join the growing number of global central banks and cut rates Down Under at least once in 2024.

Chinese officials indicated that more rate cuts and fiscal stimulus measures were pending to boost economic growth to the government's 5% target and help support the nation's sluggish property market. China's stimulus measures help the ASX 200 index reach new highs. Australia's development is closely linked to China, especially in the mining sector. China's positive measures are beneficial for Australia's commodity exports.

>>Focus on Uranium Mining Theme

An investor has chose to invest in three companies that are all related to the uranium mining business. On September 4, this investor bought shares of $Boss Energy Ltd (BOE.AU)$, $Bannerman Energy Ltd (BMN.AU)$ , and $Deep Yellow Ltd (DYL.AU)$, and did not make any trades in the following weeks. In the last 20 trading days, BOE, BMN, and DYL have risen by 17%, 36%, and 32% respectively. While each miner faces its own company-specific headwinds and tailwinds, the biggest factor pulling them all lower has been the big retrace in global uranium prices.

On September 9, uranium was trading at 10-month lows of just under US$80 per pound. That's down almost 25% from the US$106 that same pound was worth in early February when nuclear fuel was trading at 16-year highs.

On September 11, in a televised government meeting on Wednesday, Putin said (quoted by Bloomberg), "Russia is the leader in strategic raw materials reserves like uranium, titanium, nickel … maybe we should also think about restrictions."Despite the U.S. banning imports of Russian-enriched uranium beginning in May, Russia remains the largest exporter of nuclear fuel in the world. If Putin follows through on his threat to restrict exports, demand for uranium products on the Australian Securities Exchange (ASX) may continue to rise.

The investor bought in at a market low, capturing the upward trend, with the timing of their purchases aligning with the rising trend in uranium prices. By selecting three different uranium mining-related stocks, the investor has somewhat diversified their investment risk, as different companies may perform differently.

>>High-Elasticity Stock Enthusiast

This investor has a passion for buying high-elasticity stocks such as $Appen Ltd (APX.AU)$, $Droneshield Ltd (DRO.AU)$, and $Zip Co Ltd (ZIP.AU)$, and tends to engage in short-term high-frequency trading. These stocks are highly active in trading, with all three being among the top 10 stocks by trading volume on the ASX in August. High liquidity helps investors quickly enter and exit the market, reducing trading costs and slippage risk.

These stocks often experience significant intraday price fluctuations, driven by phase-specific events or previous substantial gains. This provides room for short-term trading; for example, like this investor, the holding period is typically within a week or even completing buy and sell transactions on the same day.Short-term and high-frequency trading usually relies on technical analysis and algorithmic trading strategies, requiring investors to possess the necessary technical knowledge and analytical skills. Strict risk management strategies are needed, including setting stop-loss points, position control, and capital management to avoid significant losses.

Mooer's outcome in this competition

@Feiniao: "4/9 - USA closed with NASDAQ dropped. Expecting a wild day in the market. Grabbed 3 shares that I considered as fundamentally strong. Hopefully these will be the fundamental for a rebound over the next few weeks... "

Papertrading Competition | Who won the NVDA shares and how did they do that?

@Elnishka: "I've been lucky so far, better return than expected, due to Apple share sold. Feeling that my P/L will look more stable without that large amount. I am testing my hand at reading the news ahead and also drawing on my tech experience, knowing the demand it is under, also having aging relatives and young children makes me more aware of the needs/wants mainstream."

@BigBizyBee: How I chose my positions to make the top 5 in AU Papertrading Comp S3

"The 1st thing i do is read the news on a prospective company I am interested in & with Moo that news is easily found when using the Moo App. Besides old fashioned news Moo provides a wealth of important info including P/L graphes, revenue, income, assets and even volitility. Even a projected price range that the stock may or may not reach in a day, week, month or year. All that stuff I find extremely important when it comes to deciding what stock to buy." Read more>>

@NoNo444: "Despite a lot of sleepless nights (I've got a baby) I am doing very well. Yesterday had a big shock though a big -500k day due to poor stock choices. But today another good gain. Let's see how I end up in 9 days time! Learnt a few market things that occur with stocks etc... which in real world wouldn't have been gained as experience on this paper trading is great!"

@Cindy Law:

@MooMamaLlama: "One of my bigger shifts against my usual style,for real and papertrade, was looking st $Fortescue Ltd(FMG.AU)$ on ex date, given iron ore prices are scraping bottom of barrell. However, a big drop ex date gave me an opportunity to get in around 16. Now around 19 so happy with results so far"