Samwise Quick Reference Handbook
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Hey Sam, so basically you’re pretty confident that NVDA won’t surge past 160 past September without a healthy correction in between right?
Correct. There’s very very little chance of that happening. And even if we get past September, a massive correction would shortly follow. That’s because at September expiration, the rally will have lasted 140-days which is 40-days longer than any other past rally. Not to mention the size of the rally.
We’d see a major correction in October, November, December under those circumstances and would likely be able to buy Nivida back at $130 worst case scenario. Like suppose Nvidia surges to $170 even. At that point, a regular correction takes Nvidia down to $130 anyway. That’s only a 23% decline which is less than what Nvidia normally loses on correction.
Makes sense! thank you:)
Interesting, so it’s unlikely to see NVIDIA back around $110-$120? It seems incredible to me to see NVIDIA go to $150-$170 without a major correction. We’ve seen NVIDIA’s behavior several times in the past in less than a year during a strong surge, the current one being comparable to that from April 2024 to June 2024, except that, as you mentioned, it’s 30 days versus 90 days… Isn’t that worrying? I mean, isn’t this the beginning of a sharp decline like in 2021 after the COVID V-shaped rally?
We’re not saying it’s gonna get up there. We are saying even in the worst case scenario it comes back to here.
There are any number of different ways Nvidia can come back down to 120
I am saying that worst case scenario if Nvidia continues higher, it’s gonna come back down to where we are right now in the next correction
I don’t really see the comparison of April 24 to June 24 to now…. Now was last august. For this rally to compare to April/June 24 it would need to blow past all time highs by about 40 bucks a share. If the current rally hits the 170s it would be comparable to what the stock did last year when it was $76 in april and topped at $131 in June. Currently we were $94 in April and sit at $141.88 in after hours…I’m not saying the stock will do that…but if you are comparing to last April/June the stock still has room to run before a pull back and thats with it basically doing nothing since January….whereas last year January 1 to the middle of march was basically one giant candle.
so when you think about the stock you have to think about it from the perspective and context of the stock market is a whole.
Remember, Nvidia is going to do with the stock market is a whole is doing.
And right now, the stock market is up 30% from its lows.
From a timing perspective, the stock market will have a correction between now and the fall.
Most likely based on historical trends between now and July.
Also, when you’re considering Nvidia’s upside potential, you have to take into account Nvidia’s market cap.
The stock at these levels is not gonna trade like it did when it was trading at $40 – $50 a share. The gains are going to be slower and we’re going to see a lot of volatility as we have been.
I totally get that. Which is part of why I don’t consider the comparison to the last april to june run up a good comparison. It’s much closer to What happened last August to me. I totally agree that it will pull back. For it to aptly compare to the run last spring it would have to push through the market pull back and the sentiment just isn’t there.
I see what you’re saying. It’s in response to Karl’s comment. That’s probably right on. As I see it, Nvidia’s upside is probably capped at $160-$170 max in a parabolic situation.
But realistically, it’s probably going to peak a lot sooner. For the market to get to July before correction, it would mean 100+ days for the rally and 100-day rallies are really rare.
wow NVDA to the mooooooon ????
NVDA is now the most valuable company in the world, in terms of market cap. If it stays #1, this will force index weighted funds to buy more NVDA. The timing will just depend on when these different funds do their rebalancing, and whether NVDA is still #1 at that time.
QQQ breaking $523 after the court ruling on tariffs. I guess we’re headed to ATH. Time to buy some hedges!
Quick question Sam on leaps transitioning,
Take the Nvidia Dec 2026 $100 calls for example,
Do you have an optimal time-before-expiry range (months left before expiry) when you decide the transition to a later expiry?
Putting aside timing pullbacks or corrections, just purely on time-left before expiration alone.
like how long can we hold the leaps before theta decay really eats up the gains?
So technically speaking, the two-year rule dictates that we maintain a 2-year time horizon at all times. That’s because we’ve shown the maximum amount of time it takes for hte market to fully recovery from peak to trough and back to peak again is 2-years. So that if you buy in November 2032, the market should return to those levels no later than November 2034 as an example.
And so if you always maintain a 2-year time horizon, then time alone could get you right back to where you were.
However, once hedging is involved — as is the case here — we can push that out a little more.
For me, once we get closer to 18-month to 1-year, it starts to get very uncomfortable. remember, in the leaps portfolios, we’re doing this in size. And so we have to be extra vigilant.
For the common stock portfolios, every position we hold, we have a time horizon of 2-years+ at ALL POINTS IN TIME. Meaning, for every position we’re holding right now in every common stock portfolio, Frey, Tarly and Tyrell, we’re willing to hold those positions until May 29, 2027.
Really, those portfolios have an open ended timeline. We’ll buy and sell based on the circumstances. But mostly, we’re long-term holding our positions and repositioning with protection.
In Arryn, we own the Dec 2026 Nvidia calls and rolling is now squarely on my mind. I’m already considering how to roll those forward.
The way we’ll probably do it is like this. If the QQQ ends up breaking out toward $540-$560 and if we start to get close to the 100-day mark, we’ll probably look to close out the position in the December 2026 calls. There are other ways to transition.
But the more I think about it, the more it makes the most sense to close out positions once the market has rallied 100-days. At that point — even looking back to covid — the opportunity cost virtually non-existent. While there might be more upside, the reality is that we’re very very likely to see the market sustain a 10%+ correction.
100-days seems to be the maximum for a rally. And if the NASDAQ-100 is up 35-40% and we’re nearing day 100, then we’ll close out. We may close out our entire stake and go to the sidelines completely and then just wait for the next correction. It’ll just depend on the enviroment.
There’s a lot to potentially be gained from that perspective. We could also just heavily hedge as we did back near $460-$470. Such that the hedge will produce the returns while allowing us to remain long for whatever minimal upside remains.
The alternative way to do is to do it piece by piece. What we do is wait for extremely overbought and a segmented rally cycle to close out 2 out of 6 contracts. That way we hold 4 contract in case Nvidia keeps moving higher. The 2 we sold, we’ll wait to buy on teh short-term pull-back. And we’ll use the capital to buy a later expiration.
we’d do this at different price points. The goal would be to buy a later expiration on a 5-10 point nviida pull-back. We’d do the same with teh QQQ.
We’ll dive into that a bit more later. To answer your question though, 18-months to 1-year remaining if we’re well hedged. At that point, we need to be thinking about rolling forward.
There is only one very limited set of circumstances where it might be appropriate to sell premium against our puts. It’s very narrow.
So right now, we have the March 2026 $400 puts protecting our portfolios. We bought that put position last month during the first part of the rally up to $470. We did this — and aggressively so — because it was unclear at that point whether this was a bear market rally or the start of a full-blown v-recovery. To protect our portoflios against hte potential of a bear market, we purchased bear market worthy protection. We could afford it given the returns we had produced up to that point.
Now my plan is to purchase new hedges near all-time highs — probably the June 2026 $500 puts — and then during the next correction, we plan to close out the March 2026 $400’s. Essentially we’re buying new protection and during the correction, we can try and salvage what we can from teh March 2026 puts which we no longer need.
An alternative to closing those out might be to simply sell the $350 puts against that position. So instead of closing out the March 2026 $400’s, we create the March 2026 $400-$350 put-spread. That might not be a bad idea. It gives us extra crash-proof protection. Especially if we can sell them at a reasonable price.
If the tariff issue comes back or if we get into another bear-market sized correction, those would serve us well.
So that’s the only circumstances where selling puts as premium against our hedge make sense. I’ve thought about this a lot and every other circumstance warrants either holding out puts or selling them outright.