NVDA
Borrowed some more money last week and moved it to my new and very sexy optionsXpress account. Look through the stock screener and found the obvious stocks that are still good for renting out. There’s about 15 days till the June option expiry in the US and NVDA happened to be trading AT THE MONEY (ie. lots of time value - rent money/premium)
Reason:
NVDA is a profitable company following the fundamental rules, profits rising, revenue rising, good quick ratio, good return on equity etc. Its trading relatively close to the support lines and will only require a few months of renting shares to get well below the ’safe’ zone (ie. below the last support levels). Last, its only about 15 days left and i’m getting 2.43% returns, and since its margined… its DOUBLE, cause i’m borrowing 1/2 the money in this transaction!
The Trade
Options/Contract = 100
Buy 500 NVDA @ $34.93 ($17,465)
Sell 5 NVDA 35 Calls @ $0.85 ($425)
Net Cost/Breakeven Point: $34.10
Premium: 2.43% ($0.85/$35.0)
Anyways its nearly 3am, a bit tired now… going to sleep!
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