[9th Anniv. Quiz] If I hold Nvidia and Microsoft, how to hedge possible pullback?

Has the long-awaited market correction finally begun? Yesterday, technology stocks generally experienced a decline, with prominent AI companies such as $NVIDIA Corp(NVDA)$ and $Microsoft(MSFT)$ dropping by 3%. $NVIDIA Corp(NVDA)$ closed at $374.75, $Microsoft(MSFT)$ closed at $323.38.

If I hold tech stocks, how can I hedge against this? This article will introduce three options strategies to hedge against the potential market correction.

1. Buy put

You can purchase put options on Nvidia and Microsoft to provide downside protection. In the event of a pullback, the value of the put options would increase, offsetting some of the losses on the stock positions.

Striking price: you can choose the current price of $NVIDIA Corp(NVDA)$ and $Microsoft(MSFT)$, which is $374.75 and $323.38.

2. Sell covered call

As you want to hedge the potential pullback, you are also betting that they won’t rise too much. Therefore, you can sell covered call to earn premium.

You need to select a strike price for the call options that you believe is unlikely to be reached during the given time frame. This allows you to keep your shares and the premium received.

Striking price: you can refer to the highest point of the two stock, which is Nvidia - $419.38, and Microsoft - $338.56.

3. Collar strategy

It involves combining the purchase of protective put options with the sale of covered call options. Compared to the above strategies, the collar startegy can help you decrease the cost of buying put.

Buy Put: refer to the above-mentioned current price put

These put options act as insurance against a potential decline in the stock prices. If the stocks experience a pullback, the increase in the value of the put options can offset the losses in the stock positions.

Sell Covered Call: refer to the above-mentioned high points

By selling these call options, you receive a premium, which can provide income and help offset the cost of purchasing the protective put options.

Expiration date: the most influential event for the market is the CPI and Fed decision next week. Thus, you can choose the expiration date of 16/June.


The first question of 9th Anniversary Quiz

Remember to write your answer in the comment section and repost!

The second question will be released tomorrow, don’t forget to follow me and join the quiz!

# How to pick strike prices for options?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • StickyRice
    ·2023-06-09
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    $Tiger Brokers(TIGR)$ is celebrating it’s 9th anniversary. Congratulations
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  • luv2trade
    ·2023-06-09
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    Tiger Brokers is celebrating its 9th annivesary. Happy Happy Birthday! WOW Congrats! @nickname168 @Frisbee @Shop
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  • onlyYou
    ·2023-06-09
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    Tiger Brokers is celebrating its 9th annivesary. Happy Happy Birthday! @deal2deal @nickname168 @luv2trade
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  • KYHBKO
    ·2023-06-09
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    profit taking is good.  let us also consider holding great companies for a longer term. 
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  • clouddragon
    ·2023-06-09
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    the answer is covering potential losses by buying put options, covered call options or a mixture of those
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  • Jadenkho
    ·2023-06-11
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    Tiger Brokers is celebrating its 9th anniversary.
    Yehey! Congratulations for reaching your ninth anniversary, hope to celebrate more years together🎉🎉🎉
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  • NewPower
    ·2023-06-10
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    1) Buy put options
    2) Sell covered call options
    3) Collar strategy (combination of buying protective put options with the sale of covered call options).
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  • WanEH
    ·2023-06-18
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    my answer:
    1) Buy put options.
    2) Sell covered call options
    3) combination of buying put options with the sale of covered call options
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  • LMSunshine
    ·2023-06-08
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    🐯Brokers is celebrating its 9th anniversary❣️Happiest Birthday 🎂🐯🎂 Friends come comment and repost for 9 coins🥳 @SR050321 @CYKuan @HelenJanet @rL @Universe宇宙 @Jadenkho @melson @Mrzorro @GoodLife99 @SPOT_ON @Kaixiang @BenjiFuji @RDPD富爸穷爸 @SirBahamut @b1uesky @MHh @PJoo @Pepermintpat @RiciaYang @jat @Omega88 @爱上投资学 @Zeniv @Elon2 @Yonhuat @Joker_Smile @grizzlylee @FrankieRed @spkek @snoopy123 @psk @pekss @amroui @Ericdao @StickyRice @StarLuck @Shyon @Success88 @kungpao @CL_Wong @Derrick_1234 @MeowKitty @Thonyaunn @紫南 @Zarkness @Ah_Meng @Ratt @Tigress02 @Viv22 @aunteenat @Cory2 @airui @0QH @Cris0 @Brocco @AhGong @deal2deal @nickname168 @Ccl2 @Lcc73 @HLPA @WanEH @markele @pipiso @hlw8888 @Huiz84 @Kingcat @RedpillBluep @Furore @breAkdaWn @boardy @Soyabean89 @ngph @KYHBKO @Lionel8383 @Downton @SanWangtikup @Setia100 @th0mastan @LesterTan @IAS @HSTew @Kerrisdale @PhilipChow @alylady @moliya @maricel @Sonoma @LuckyPiggie @Doge2theMoon @equitygenius @StayHome @SGboy @Sandyboy @Stayclose
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    • Elon2
      Thanks Sunshine [Heart][Heart] same no tag for this post
      2023-06-09
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    • ShyonReplying toGoodLife99
      Or those uncoloured in blue will not receive?
      2023-06-08
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    • GoodLife99Replying toShyon
      @LMSunshine same, not receive too but received Shyon'tag
      2023-06-08
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  • koolgal
    ·2023-06-09
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    🌟🌟🌟$Tiger Brokers(TIGR)$  is celebratingits 9th Anniversary!  9 awesome years and many more to come.  Congratulations on this Special Occasion.  I am so happy to be part of this wonderful Tiger Community! 😍😍😍

    @Thonyaunn  @CL_Wong  @Derrick_1234  @MeowKitty  @firefirefire  @AlpineSnow  @IN76  @Shyon  @CMLeong  @ChaoAhBeng  @traveleat123   Please join this Quiz to win more Tiger Coins! 

    @Tiger_comments  


    re Tiger Coins! 😍😍🌈🌈🌈🍀🍀🍀💰💰💰

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    • koolgalReplying tofirefirefire
      Thanks my friend.  May you have a roaring week of success 🍀🍀🍀🌈🌈🌈🎉🎉🎉
      2023-06-13
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    • firefirefireReplying tokoolgal
      the week has ended...a new week has began.. Best wishes ❤
      2023-06-13
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    • koolgalReplying tofirefirefire
      Have a wonderful weekend 😍😍😍🏖️🏖️🏖️🌈🌈🌈
      2023-06-10
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  • Fenger1188
    ·2023-06-08
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  • Kaixiang
    ·2023-06-08
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    • Kaixiang
      Much welcome! TGIF! [Grin]
      2023-06-09
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    • Universe宇宙
      [Wow]
      2023-06-09
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    • koolgal
      Thanks for sharing
      2023-06-09
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  • MHh
    ·2023-06-08
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  • koolgal
    ·2023-06-09
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    🌟🌟🌟 $Tiger Brokers(TIGR)$ is celebrating its 9th Anniversary! Congratulations 💐💐💐I love ❤️❤️❤️ Tiger Brokers for your awesome Tiger App and Best of all, I have made so many Tiger Friends 😍😍😍🌈🌈🌈
    @sunflower19 @Happy Bear @THEWIZARD @zuma @melson please join in this easy Quiz to win more Tiger Coins! 😍😍😍
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  • koolgal
    ·2023-06-09
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    🌈🌈🌈Tiger Brokers is celebrating its 9th Anniversary!  Congratulations 💐💐💐 9 Glorious Years! @WinnerSG @tarotsgirl @shirlyn_lee @Ah_Meng Please join in this easy Quiz to win more Tiger Coins 😍😍😍
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  • Aqa
    ·2023-06-09
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    🌟🌟🌟🎂🎂🎂㊗️ Tiger Brokers is celebrating 9th anniversary in 2023! Thanks @Tiger_comments 👍🏻 😊😊😊 for this Quiz and Three Options strategies to hedge against the potential market correction. 🚀🚀🚀🚀🚀🚀🚀🚀🚀
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  • Aqa
    ·2023-06-09
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    🌟🌟🌟🎂🎂🎂 ㊗️ Congratulations! Tiger Brokers is celebrating 9th anniversary in 2023! Thanks @Tiger_comments for this 9th Anniv Quiz and Three Options strategies to hedge against the potential market correction.
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  • 安安0715
    ·2023-06-08
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    我的答案九周年🎊🥳❤️ @Chooer @MHh @rL feng er 1188
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  • Shyon
    ·2023-06-08
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    9th Anniversary for Tiger Brokers in 2023!

    Come and join everybody @melson @LMSunshine @GoodLife99 @Aqa @Universe宇宙 @rL @koolgal

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    • Universe宇宙
      [ShakeHands]
      2023-06-09
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    • koolgal
      Thanks for sharing
      2023-06-09
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  • Alvinlimsg
    ·2023-06-08
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    感谢精彩分享👍🏻👍🏻👍🏻我的答案:九周年🎊朋友们请加入活动赢虎币或有机会获得老虎礼物❤️❤️❤️❤️
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    • koolgal
      Thanks for sharing
      2023-06-09
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