I said the same thing and was ignored. The strategy makes no sense. All the risk of NVDL for little upside. If he's correct and NVDA soars, he gets his shares called away with very little upside. If he's wrong, he could get wiped out. The risk/reward profile of this trade is terrible.
I never understood why NVDL and why sell covered calls. If you were to make such a risky conviction bet, buying calls seems like a better bet. For example, today's calls for one year out (Sep 2025) are $20 at $120. So it'd need to go to $140 to break even, $160 doubles your money, $180 triples your money and so forth. But the most you can lose is all the money that you put int. If you think it's going to $200 in a year, taking a fraction of your funds and putting them into options limits the losses, but gives you leverage on the gains. Selling covered calls gives you a different return profile, but if you were truly bullish (and why else would you be leveraged 2x?), it doesn't make as much sense to me. Either go big, or go for plain NVDA.
That said, NVDL isn't a long term holding, and even going so heavily into NVDA is ill-advised.
Also, he basically called peak TSLA with his first post (it went up a little at first, but TSLA is down 25% since and SPY up 50%). Now he's probably called peak NVDA. His NVDL shares are down 30% so far.
Statistics: Posted by moneym — Tue Sep 03, 2024 11:47 pm