Power Plays Options
New Idea: NVDA Puts
February 26, 2025
By Scott Redler
We have never had a put position in Power Plays Options, but today that changes.
I believe Nvidia (NVDA) is at risk of a post-earnings decline so I am adding this position:
- Long NVDA February 28 $120 Puts
These puts look good in the $2.75 to $3.50 area (or lower).
With Nvidia's decline off its highs and lower valuation, some believe a lot of bad news priced in.
I disagree.
We're still looking at a stock with a $3 trillion market cap and rosy expectations for endless long-term growth.
So to me, the odds favor a post earnings decline.
If this report isn't anything less than 100% shoot-out-the-lights perfect, we could see a hard drop below the $120 area.
And Nvidia doesn't even have to miss for the stock to sell off. We could see a solid beat and the stock could still drop just because everyone's so used to enormous earnings surprises here.
This isn't a guaranteed scenario of course. Nvidia could surprise to the upside.
But I believe these puts have a strong risk-reward.
-Scott
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