To The Moon

Investor Michael Burry's fund showed in its latest 13F report filed with the U.S. Securities and Exchange Commission (SEC) that Scion Asset Management, which he manages, bought put options on Nvidia and Palantir on a large scale. Targeting$Nvidia (NVDA) $The put contract of about 1 million shares (notional value of about 187 million US dollars), and about 5 million shares of Palantir (notional value of about 912 million US dollars)-the two combined are about 1.1 billion US dollars, accounting for about 80% of the fund's disclosed holdings.

Burry's move was interpreted by the market as his strong skepticism about the AI boom (especially Nvidia in the field of chip + AI hardware and Palantir in the field of AI software/data analysis).

Nvidia shares fell in premarket or overnight trading after the news flowed out. In addition, technology stocks, especially AI-related stocks, experienced a big pullback/retracement that day, and NVIDIA's stock price has fallen by about 4%-7% from its recent high.

As Nvidia's stock price has risen significantly during the year (more than 80%), its P/E are already at historical highs, causing some institutions to worry about valuation bubbles. Between strong fundamental support and high valuation pressure, the market is clearly divided: bulls believe that the AI cycle has just begun, while bears are wary of the risk of a high pullback.

In this environment of "strong fundamentals but short-term sentiment under pressure", investors may considerBull Put Spread Bull Put SpreadStrategy to obtain stable returns with limited risks.

Bull Put Spread Strategy

1. Strategy structure

Investors sell put options with higher strike prices (K ₂ = 190, premium $1.06),

At the same time, buy the put option with the lower strike price (K ₁ = 185, premium $0.59).

Both options have the same expiration date. Investors gain more premium by selling high-strike options, and then use part of the income to buy low-strike protective put options, thus formingBullish, risk-limitedCombination of.

2. Initial net income

• Net premium income = 1.06 − 0.59 =$0.47/Share

• Corresponding total revenue = 0.47 × 100 =$47/contract

• Investors get this premium when they open a position

• This income is strategicMaximum potential profit

3. Maximum profit

• Condition: Nvidia stock price ≥ at expiration$190

• Result: Both puts lapse, investors retain all premium

• Maximum profit = $0.47/share × 100 = $47/contract

4. Maximum loss

• Condition: Nvidia stock price ≤ at expiration$185

• Result: Both put options were exercised, resulting in a strike spread loss

• Loss = (190 − 185) − 0.47 = $4.53/share

• Maximum loss = 4.53 × 100 = $453/contract

• Investor risk is limited risk

5. Break-even point

• Calculation formula: Strike price (sell) − Net premium

• Breakeven = 190 − 0.47 = $189.53

• When the stock price is above $189.53 → investor profit

• When the stock price is below $189.53 → investors lose money

6. Risk and return characteristics

• Maximum benefit: $47/contract

• Maximum loss: $453/contract

• The profit/loss ratio is approximately 1: 9.6(The benefits are less than the risks, but the winning rate is high)

• Applicable scenarios: The stock price fluctuates too much, volatility decreases, or rises steadily before expiration

• Strategic positioning: Steady and bullish, mainly based on premium income

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