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【Investment Hot Talk】Where are the opportunities after the continuous decline of the US stocks?

Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state.
Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are.
How to understand this major drop?
This drop, cannot be separated from the valuation correction of Technology stocks.。
This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks.
Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this.
In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
In addition,Weak economic data is also an important reason.The recently released USA February Consumer Confidence Index significantly fell short of expectations, recording the largest single-month decline in over three years. The expected index is also the first to drop below the critical value of 80 since June 2024 (this value usually indicates an economic recession).
The uncertainty of Trump's policies is also a major concern for the market.There are concerns that global economic growth may be affected, for instance, the suspension of tariffs on Canada and Mexico is about to expire. If Trump indeed reinstates the tariffs, then it is more likely that the economy will enter stagflation.
However, from a technical perspective, it may not have reached a state of panic yet. In the current market environment, it is more important toseize short-term opportunities amid risks and ensure stability in long-term investments.
Seize short-term opportunities amid risks.
In the short term, the possibility of US stocks continuing to face pressure cannot be ruled out, under such circumstances,some investors with a relatively high risk appetite may use Options to hedge against downside risks or lock in risk returns.
For example: with Stocks held, Buy Put to constructProtective Put (protective put option strategy).The potential maximum loss of this strategy is limited.The Long Collar options strategyis also quite common, it reduces overall costs by selling call options based on the Protective Put.
Alternatively, consider a strategy to go long on volatility options, includingBuy a Long Straddle.andBuy a Long Strangle.and so on. Alternatively, after volatility reaches a higher level, consider a counter strategy to short volatility, includingSell a Short Straddle.andSell a Short Strangle.etc.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
Or discover trading opportunities through various Options tools: some investors will find unusual Options activity inUnusual Options Activityfunction (Click here to go directly) to discover the unusual Options symbol, analyze possible reasons, make determinations, and trade related Options symbols. There are also investors who may be inthe "Options Seller Area"（Click here to go directlyFilter stocks that are held or close to earnings periods, selecting options with higher IV levels, higher liquidity, and lower exercise risk (choose appropriate strike prices to ensure they are more out of the money) for Sell, etc.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
After anchoring the option symbol, it is also possible to check before the market opens.期權價格計算器To see what the theoretical price of the option is based on the current pre-market price of the underlying stock and volatility.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
Finally, in the absence of a position in the option, assuming the option price is about to rise significantly, consider submitting a Buy order with a trigger price as a stop-loss order, or a Sell order as a take-profit order. If the option price is about to drop significantly, then submit a Sell order with a trigger price (referring to the predicted theoretical price) as a stop-loss order, or a Buy order as a take-profit order.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
More information about these order types can be found here.Click here., as seen in the second part of the text. If you want to Trade Options, beginners can, click here, first take the HK2188 gift package (limited to new Options users in Hong Kong).
Of course, in short-term trading, it is important to remind everyone to pay extra attention to market trends, economic data, and policy trends to adjust their investment strategy at any time.
In long-term investment, stabilize and support well.
Although the US stock market may experience significant short-term fluctuations, in the long run, if investments are focused on value and principles of value investing are maintained, even if the market continues to fluctuate, one can eventually reap the rewards of time.
In terms of long-term allocation, fields like AI, Cloud Computing, and other Technology sectors are still directions favored by the market. Defensive Sectors, assets with stable cash flow and high dividend yields, Gold, and other safe-haven assets are also often considered in a healthy and robust investment portfolio.
In practice, it may be considered to gradually build positions to reduce the impact of volatility, as well as to manage positions well and set profit-taking and stop-loss measures. Lastly, here are two good methods for position management to share.
Recently, the US stock market has shown a significant correction. Especially the NASDAQ, which has seen a substantial drop, with a cumulative decline of over 5% in four trading days. What might investors be thinking? They may feel too much pain and want to escape, while also having a keen sense that maybe it's a bottom-fishing opportunity. Then they might be caught in a dilemma, unable to run or take action, just consuming themselves in that state. Niu Sir understands everyone's feelings because Niu Sir also has similar experiences. But let's not rush; first, let’s look together at what the reasons are. How to understand this major drop? This drop, cannot be separated from the valuation correction of Technology stocks.。 This is because the NASDAQ contains a large number of Technology stocks, but recently, large Technology companies such as NVIDIA, Tesla, and Microsoft have not performed well, leading to market sell-offs of high-valuation Technology stocks. Why have these stocks dropped? Microsoft recently cut its computing power leasing contracts and mentioned that 'the return cycle on computing power investments has been extended', raising market concerns about an excess of AI computing power, which has directly impacted the chip and Cloud Computing sectors. The drop in Microsoft and NVIDIA is largely due to this. In addition to the upcoming earnings announcement, the implied volatility of some NVIDIA Options even exceeded 160%, indicating that market expectations for NVIDIA's short-term volatility have reached very high levels. Tesla's decline may have more personalized reasons, as Musk has offended too many people. In addition,Weak economic data is also an important reason.The recently released data from the USA in February...
One is the left funnel-shaped position management method, which is more suitable for estimating that stock prices will decline but the decline space is not large. The approach involves buying in batches, with each purchase being larger than the last, creating a funnel shape.
Because the initial position is relatively low, even if entering at a midpoint, it is possible to continuously average down the cost. However, the risk is that if the judgment is completely wrong, and the stock keeps declining endlessly, the bullets run out without seeing the bottom, ultimately resulting in being trapped. To avoid this situation, the intervals between purchases can be increased.
The other is the pyramid-shaped position management method, which is more suitable for anticipating that the market will turn from decline to rise. The initial entry capital is larger, and if the market continues to decline, no additional positions are added, but when it begins to rise, additional positions are added with gradually decreasing proportions.
This method has a relatively large position before the market starts, and as the market improves, it will bring more potential returns. However, if the market does not improve or continues to fluctuate, it will also pose a risk of loss.
Alright, today that's all from Futubull. What do you think will happen to the US stock market in the next few days, will it rise or fall? Are there any operations you plan to do recently? Feel free to leave a comment and Share~
If you have more to discuss, you can also join Futubull.Official Investment Exchange GroupLearn, the Chief Analyst is online in real-time to teach! Follow @Futubull Education , orclick hereEnter the Education class to gain more investment insights and significantly enhance investment skills!
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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