Recently, Nvidia's stock price has suffered a severe drop, leaving many investors in a short-term duvet situation. How to turn passivity into initiative and use smart trading strategies to “protect capital” or even increase profits? This article focuses on two major strategies: covered call options trading and trend line trading techniques to help you cope with market fluctuations.
I. Covered Call Strategy: Nvidia's “Capital Protection” Strategy Amid Stock Price Fluctuations
Faced with Nvidia's share price falling below the purchase cost, adopting a covered call strategy is a wise choice.
The specific operations are as follows:
1. Strategic core:Sell a call option above the current price to lock in premium income early.
2. Case analysis:Let's say investors buy Nvidia shares (100 shares) for $140, and the current market price falls to $118.11. By selling call options that expire on July 4 and have an exercise price of $140 (note, 1 option does not correspond to 1 share, but 100 shares), you can immediately obtain a premium of $49 to reduce losses on your position and provide immediate cash flow.
How does this strategy make money:
The key to this investor's strategy to make money is the actual performance of the stock price and the state of the option when it expires:
1. The stock price does not exceed the exercise price: If Nvidia's stock price remains below $140 on July 4, the options will become worthless. This investor can keep the shares while retaining the royalties collected. His final benefit is: receiving the royalties of 49 US dollars (before fees).
2. Stock price increase:Such as...