NVDA Earnings play for tomorrow (8/27) · Invest & Retire Community

Aug 26 (edited) • Monthly passive income

NVDA Earnings play for tomorrow (8/27)

I'm planning to make a trade tomorrow for NVDA. Wanted to share with you all.

The current price is ~182$. I took past 5 years of daily history and got the biggest single day drops. The highest drop is ~17% and the next highest is ~10%. Only 10 drops above 8% in the past 1000 days.

Given that info, I plan to sell a (this Friday expiry) put tomorrow 5 minutes before market close (Earnings is after market close) and plan to close it 15 min after market opens. I'm looking at these strikes

150 Strike which is 17% OTM: Yields 0.11% return. Very safe based on history
164 Strike which is 10% OTM: Yields 0.61% return. The 10%+ moves happened only twice out of 1000 occurrences. So this is pretty safe as well
167.5 Strike which is 8% OTM: Yields 0.81% return. The 8%+ moves happened only 1% of the time

Given that I'm risk averse, I wouldn't go for higher strikes than this. Most probably will shoot for the 164 strike which is 10% OTM. I might also consider a put spread for 164/150 strikes fetching me 0.5% which is great as well and protects me from any tail risk. If the stock drops below my strike tomorrow, I'll look to roll it out for credit.

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