A Bearish Nvidia Options Trade

On CNBC's Options Action, Carter Worth spoke about NVIDIA Corporation NVDA. He said the stock is the best performing tech name, but he thinks the trade is crowded and that there isn't much upside ahead.

Worth explained that in the last 10 months, the semiconductor index didn't have a single pullback to its 150-day or 200-day moving average. Since the beginning of the data for the index, there has only been one instance where it hasn't checked back to the trend in the 12-month period.

Mike Khouw suggested that traders should buy the June 100/80 put spread for a total cost of $5.40. The trade breaks even at $94.60 or 5.71 percent below the current stock price. It can make a maximal profit of $14.60, if Nvidia drops 15.43 percent or more at the June expiration.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date of Trade
ticker
Put/Call
Strike Price
DTE
Sentiment
Posted In: CNBCOptionsMarketsMediaTrading IdeasCarter WorthMike KhouwOptions Action
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!