To The Moon

Week's put strategy picks

1 $NVIDIA Corp(NVDA)$

sell $NVDA 20250117 395.0 PUT$

Exercise price: 395; Expiration date: ; Volume: ; Total turnover: ; Stock price at transaction: ;

Annualized return: 10.8%

Recent news:

NVDA shares have rebounded sharply, nearly tripling year-to-date. While data center and artificial intelligence chips will further drive chip demand, macroeconomic uncertainty and the risk of a global recession remain. In the wake of the Hamas attack on Israel, Nvidia canceled its AI summit scheduled for October 15-16 in Israel. On October 17, the United States tightened export restrictions to China, a move that will target Nvidia's A800 and H800 artificial intelligence chips. Affected by AI chip restrictions, the stock fell more than 5% on October 17.

Nvidia will report earnings on November 21, and the company expects Q3 revenue of $16 billion, up 170%.

2 $Meta Platforms, Inc.(META)$

sell $META 20231117 305.0 PUT$

Exercise price: 305; Expiration date: Nov 17, 2023; Volume: 5250; Total turnover: 6.42 million; Stock price at transaction: 317;

Annualized return: 59.75%

Recent news:

Meta, which will report Q3 earnings after the closing bell on October 25, is the second best performer this year, up about 168% year to date, second only to Nvidia. Meta's second quarter revenue grew by double digits for the first time since the fourth quarter of 2021, shaking off three consecutive quarters of negative growth in the first quarter. Meta's CFO expects third-quarter revenue to be between $32 billion and $34.5 billion, up about 15% year-over-year.

3 $Tesla Motors(TSLA)$

sell $TSLA 20260116 175.0 PUT$

Exercise price: 175; Expiration date: Jan 16, 2026; Volume: 1500; Total turnover: 4.73 million; Stock price at transaction: 221.81;

Annualized return: 7.1%

Recent news:

Tesla announced the third quarter earnings report on the 19th, revenue, profit and gross margin are lower than market expectations, coupled with Musk in the French conference on the electric pickup truck Cybertruck poured cold water, said that the new car in mass production 12 to 18 months after the opportunity to bring significant positive cash flow, and stressed that Tesla will continue to reduce prices. The stock fell more than 12 percent as of Oct. 23.

4 $Apple(AAPL)$

sell $AAPL 20231201 160.0 PUT$

Exercise price: 160; Expiration date: Dec 1st; Volume: 3900; Total turnover: 858,000; Stock price at transaction: 172.98;

Annualized return: 11%

Recent news:

Apple, which reports earnings after the bell on Nov. 2, is expected to report its third consecutive quarterly revenue decline. Wall Street expects sales of $81.7 billion, down about 2.3 percent from last year. So far in 2023, Apple shares have risen more than 51 percent to an all-time high. Analysts expect Apple to post another year of revenue growth, but next quarter's earnings forecast, which could provide clues to a soft global landing, is more important to the market.

5 $Marvell Technology(MRVL)$

sell $MRVL 20231124 44.0 PUT$

Exercise price: 44; Expiration date: Nov 24; Volume: 5625; Total turnover: 270,000; Stock price at transaction: 51.84;

Annualized return: 18%

Recent news:

Marvell's results and guidance last quarter were largely in line with expectations, and the company will benefit from the growing demand for custom designed semiconductors. The future market for application-specific integrated circuits or custom chips will grow at a rate of 20% per year, and Broadcom and Marvell Technologies will be the biggest beneficiaries of the recovery in custom chip design.

Overview of selling put options

Sort by turnover

Sort by volume

Strategy introduction:

Selling a put option is a common option trading strategy.

A put option, as its name suggests, represents the right to short a stock. A trader buying a put option usually indicates a bearish trend in the stock, while selling a put option indicates that the trader wants to buy the stock at a certain strike price, or believes that the stock price will not fall below a certain strike price for a certain period of time, thereby earning a premium.

Sell the put option to receive the right to profit, and assume the obligation to exercise the right to buy the stock at a future agreed time.

Strategy advantages: sell to get the right fee, when the option expires, when the stock price is higher than or equal to the exercise price, there is no need to accept the positive stock.

Strategy disadvantages: When the option expires, when the stock price trend is not as expected and falls below the exercise price, it is still necessary to buy the positive shares at the exercise price, that is, to buy the shares above the positive share price.

Example:

When the stock price of Coca-Cola was 40 in that year, Buffett sold 5 million shares with an exercise price of 35 put, and obtained a royalty of $1.50 per share (that is, $750). If the expiration stock price was not lower than 35, the put would be cancelled and Buffett would earn 7.5 million. If the expiration stock price reached 35, Buffett would buy 5 million shares of Coca-Cola according to 35. And since the first 1.5 earned, the equivalent of the cost per share is only 33.5.