BY ANDREW GIOVINAZZI 

September 10, 2023 

Yo Pit Crazies,

After doing this trading thing for 30 years, I’ve come to a few conclusions. I am only going to give you one or two because I don’t want your head to explode with ideas.

Planning options trades is much easier when the market gives me something. You just have to learn to spot when that is.

My big lightbulb moment in my transition to retail trader was when I learned to just watch a group of stocks and see when something is out of the ordinary.  That became the Easy Trade Button.

Nvidia Inc (Ticker: NVDA) is on my list because it’s a monster stock. The biggest issue is the option premium prices, but I can get around that with spreads.

There’s an opportunity here … if you know how to spot it.

NVDA IV is at Year Lows and the Stock Price is Near Year Highs

Mark and I developed a filter for this many moons ago. The key is that the stock has to be making new highs and low IV and NVDA is off about 8%. It’s not quite there for the Easy Button trade, but NVDA on Fintwit with “fraud” claims and China pressuring these sensitive tech areas make for a “story”. I’ve found it better to buy options where there’s a story afoot.  

The market is giving me low volatility with a story. That is the goody, so now structure a risk adjusted trade since I don’t know where exactly NVDA goes.

If I were to structure a trade I would “sell” the 500 strike via calendar spread and buy a junk 425 put. Unwind the trade on a news story this week.  Set it up as a paper trade and see how it performs.

To Your Trading Success,

AG