Option Strategies: ULTA& NVDA
Hello everyone! Today i want to share some option strategies with you!
1.
Taking an optionselling trade on $ulta beauty(ULTA)$ for earnings this week. Joining Dub-B (aka Warren Buffett) on his bet that ULTA will eventually move back up in price.
Trade: Sell-to-open a naked put at the 300 strike
Earnings Date: Thursday, Aug 29 after market close
Expected Move: 7%
- Downside target is around 352
- Upside target is around 405
300 strike would be more than 2X the expected move to downside.
Might strangle the trade. If we do, will sell a naked call at the 450 strike (or higher). Not much volume resistance between 400 and 475, but gonna play the probability that ULTA doesn't have a +20% post-earnings upside move.
* Note: This trade is not meant for assignment, but we are prepared to take shares if the 300 strike is breached. We will simply roll the trade down-and-out to lower the entry price if strike is breached and we are forced to go long.
2.
All 👀 are on $NVIDIA Corp(NVDA)$ this week for earnings. We are taking an optionselling pre-earnings trade and its simply going to be this:
▫️ Sell-to-open covered calls, Aug 30 expiration, 150 strike
▫️ Sell-to-open cash secured puts, Aug 30 expiration, 90 strike
140 is the recent top. Would love to lose our long position at 150. That said, depending on how price action plays out heading into Wednesday, we might roll down the CC strike from 150 to 145 or 140.
90 is the recent bottom. Lots of buyers stepped in at that price. We're assuming that level will be heavily defended, so we'd be happy to add to our long position at that price. And if we wanted to capture more premium, then we will move up the strike to 95 or 100.
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