Great perspective on stock divergence from fairmarket being the norm! I definitely agree.
Im ok admitting I was short nvda into this. I learned in 2021 to use itm puts when I have meaningfully sized shorts on to manage tail risk. In this case I was using 10% ITM (330 strike puts) expiring in June and July. I paid a 1% premium for them. As a result only lost 1/3rd of the earnings move price and I can safely reload short if I chose as there is no infinite short squeeze risk.
Honestly I'm not sure I will. I lean bearish but NVDA earnings guide was huge for Q2 and on the call they called for further acceleration into H2. They are trading at 55-60x FCF, which is expensive but if you assume a 20-30% growth rate passed Q2 guide into 2025, they are the same FCF multiple as Apple in 2025. There is a big narrative here and I'm not sure if it gets proven wrong in the next 2 quarters.
I'm looking forward to the day great stocks are cheap again. There are some good value and small cap names now approaching below cycle mid point valuations. Unfortunately if we are going into a recession they probably get cheaper before recovering.
Great perspective on stock divergence from fairmarket being the norm! I definitely agree.
Im ok admitting I was short nvda into this. I learned in 2021 to use itm puts when I have meaningfully sized shorts on to manage tail risk. In this case I was using 10% ITM (330 strike puts) expiring in June and July. I paid a 1% premium for them. As a result only lost 1/3rd of the earnings move price and I can safely reload short if I chose as there is no infinite short squeeze risk.
Honestly I'm not sure I will. I lean bearish but NVDA earnings guide was huge for Q2 and on the call they called for further acceleration into H2. They are trading at 55-60x FCF, which is expensive but if you assume a 20-30% growth rate passed Q2 guide into 2025, they are the same FCF multiple as Apple in 2025. There is a big narrative here and I'm not sure if it gets proven wrong in the next 2 quarters.
I'm looking forward to the day great stocks are cheap again. There are some good value and small cap names now approaching below cycle mid point valuations. Unfortunately if we are going into a recession they probably get cheaper before recovering.
yeah i am still bag holding my ZM but I averaged down ~$65/share and i think at some point the price will recover.