Samwise Quick Reference Handbook
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I know I’m trading with you, as a new member, but ultimately looking for LT investments. Being patient and trying to allocate a smaller percentage to trading until those investment buy zones hit *cough *cough NVDA
Do you feel like the Blackwell numbers are mostly priced in? That’s one of the potential catalysts this report has the last two didn’t
I don’t think the numbers matter at all. As long as the numbers come in pretty much as expected, they won’t have an impact one way or the other. It could only hurt if it disappoints at all. It won’t help if it’s a mild beat. If it’s a big beat, it can help.
But it has to force everyone to readjust their numbers again. I think more important are demand concerns after Deep Seek’s breakthroughs on efficiency. Market will want to know how this has impacted and could potentially impact demand.
So we’re at the point where we’re hoping NVDA has a big rally to where it was 6 months ago??? I don’t understand all the downward pressure on this stock….Not to be negative on it…but beginning of the year it was high 140s now it’s struggling to stay in the 130s? It’s been marking time now for 8 months…I know it’s a mature stock Yada Yada, my buyin is 70 bucks so I’ve made money if I sell…but jeez it’s just not seeming to go anywhere….and the hope is 170 currently if things go right….Maybe going into VOO or QQQ or Berkshire and keeping my gains may be better at this point
It’s now a different company and there’s ways to make a lot of money on it. But it’s not the same type of go up 100% in 2-months type asset anymore. To get those types of returns you have to use inherent leverage through DITM calls and call-spreads.
The stock itself has bumped up against the law of large numbers. I remember last year people were throwing around those $10 trillion and $20 trillion numbers. I used to get a chuckle out of that. That will NEVER happen. Not anytime soon. Only because there just isn’t enough capital out there to do it. Also, the earnings aren’t there to justify prices at those levels. Not for the time being.
So now what you’re left with is getting in a low price and selling covered calls against your position and/or leveraging through options strategies.
I’m not asking for 100% in 2 months….more like just actual growth. Since July NVDA has trailed both the S&P and NASDAQ, not sure its worth the risk if it can’t compete with market etfs….thats not even looking at the butt kicking Berkshire is giving it. I like to buy and hold and don’t mess with options and all that…..maybe time for me to get out.
hi Sam, I’m not able to trade call spreads so I have been buying 2x ETF’s (TSLL + TQQQ specially.) If we see some more down legs here am I at risk holding these in terms of decay? I know you mentioned NVDL performs quite well and you like holding it long term. just not sure if that same outlook applies to TSLL and TQQQ. I’m sure the length of holding plays a factor into it, just not sure how I should proceed if things take a turn for the worst
Watch out on that TQQQ. It’s a 3x ETF not 2x. You want QLD for 2x.
So I’m very limited in what I can say when it comes to offering insights on positions that we currently do not trade. I can only really talk about the assets and strategies in our model portfolios. There are constrains on certain types of free speech when it comes to this particular issue.
I’m working on developing a multi-tiered strategy that would allow us to venture into these areas.
The two strategies we employ to combat theta decay and IV crush are call-spreads and short-duration DITM calls.
So as I mentioned above in today’s post or remember back to early December when volatility skyrocketed, there’s a strategy that we might use where we buy an expiration that’s happen right around the corner.
For example, the March 21 expiration happens in just 3-4 weeks time. We almost used this strategy yesterday.
Right now, the March 21, 2025 options expire in 18 trading days. They cost $22.60 right tow with the QQQ at $515.32. That means those calls have $15.32 of intrinsic ACTUAL value. Why? Because they are $15.32 in the money. That also means those options only have $7.30 of extrinsic value evolving time value and volatility.
Now suppose we expect the QQQ to rebound $20.00 up to $530 a share. If that happens, the $500 calls would be worth $30 no matter what. Even if all premium disappeared. That’s an $8.00 gain or almost 35-40% just on intrinsic value alone. Of course they’ll be premium involve as well.
The problem with this strategy is it’s also unforgiving. While the QQQ is deeply oversold, if the QQQ doesn’t perform immediately, it has other problems. If the QQQ decides to buck the long trend and crashes, then it’s a big loss.
But in situations where volatility is through the roof and where we’re very confident in the rebound, then we might consider that alternative.
Ultimately, I still found the $540-$550 call-spread to be better overall. It does everything we want.
What would be the best action here given that I did not buy call-spread for NVDA for Apr option ? Is it better just to cut the loss before earning today or hold through the IV drops ? Wish Robinhood did not introduce the crap level testing for Call-Spread usage jeez.
Unless you failed the test, it was just a 5 minute call for me. They only asked me about which spread I wanted to use and questioned me on how it is used. Didn’t have to talk about strangles or puts.
So I’m very limited in what I can say about positions or strategies that we’re not directly employing in the model portfolios. This is an issue that comes up a lot and I often have my hands tied in the ways I’m permitted to answer.
Here’s what I will say. Even if I could answer, the very reason we sell a covered call — and when we can’t do so, we just close the position or reduce the position — is so as to not be in this situation which is impossible manage.
Suppose for example, I was allowed to answer it. There are only so many options here and all of them have their extreme upsides and downsides.
If I say sell the position, Nvidia could go up $15 after earnings and that would be horrible outcome.
If I say hold it, Nvida can crash after earnings and smash the position. Or it can go up, and IV can crush the position.
See the issue? It’s a gamble at this point ether way. We sold calls against our position so as to not have to worry about being in this position to begin with. Nvidia is a tiny position in the portfolio now because it’s call-spread. So it has very little to impact on the portfolio regardless of what Nvidia does after earnings. What’s more, we’re set up so as to take different actions depending on what Nviida does. If it drops, we can covered our short call or add given Nvidia would be oversold. If it rises, we may cover if the short all is down or even or do nothing.
I’m still struggling with getting any push notifications on my Android, but I’m sure it’s related to my efforts to degoogle it as much as is reasonable for a Samsung device. Do you happen to know what system apps Google would require to be working to get a push notification? Don’t worry about it if you don’t, I’ll just look into it based on your mentioning of Firebase.
Sam, any chance you might trim your QQQ positions as well? I’m assuming you’re waiting for the RSI to hit around 50 for that?
Ha, I think you answered via your trades right as I was typing my question.
the RSI didn’t rebound yet to 50 so I’m a little confused why Sam sold
RISK. Straight up risk. We’re holding too many positions and there’s too much risk. We’re close enough to the mid-line. we bought those large position yesterday to help cushion and off-set some of the entries we made in other positions. But we have to raise cash given the way things unfolded.
That way we can add to our positions as the QQQ comes in. And if the QQQ doesn’t pull-back, well then great. So it’s essentially a win-win. we reduce risk, raise capital and hold positions that could produce if the market continues moving higher; but if the market rolls over, we can now add.
For reference: We talked a bit about open ended calls vs. vertical bull call spreads in the comments yestereday so I posted a question about it in the Chapter 4 Investing Basics Q&A for those interested! (https://sam-weiss.com/investing-basics/chapter-4-qa/#comment-2215).
Damn there’s a lot of unanswered questions in there. I was just thinking about this. So I get emailed anytime someone posts a comment and I’ve been clicking and answering htat way. but recently there’s a been a flood of questions so I’ve somewhat unintentionally abandoned that approach and just go straight to the daily breifing. I need to go through and search e-mails for chapter questions. I’m sure there’s a bunch of things I didn’t answer there. Sorry about that. Thanks for reposting there. I’ll take a look.
Oh, no worries Sam! I mainly posted it here so other people are aware in case they wanted to follow along 🙂
Alphabet is pretty oversold as well right?
It did us dirty last time >.>. SO glad we exited when we did.
Yeah me too! Since it’s on its 3rd oversold I guess it’s gotta go up at some point 🙂
I think we made a small amount of gains on it too. We actually existed because it had a huge gap to fill. so it’s doing that now. We might buy it. I got look at it.
true, I’m just being over dramatic :p. That exit time was clutch.
Also this MSFT 415 call that you sold the other day, is now below 8.00.
It’s because they suck at sending push notifications to its own devices lol.
Sam，thank you for the detailed explanation of calls vs spread, my first ever experience of buying spread started by following your trades; yes, I did a little research on spread, but still am not very sure why, now I truly understand and feel more confident with these strategies.
Thanks for taking the time to make things clear!!!
Is TSLA playing us dirty right now ?
Sam, it seems like the highly anticipated rebound was just canceled by the news on recession fears. Does that mean rebound is simply delayed or not going to happen? I did not trim my QQQ positions as I missed the notification. Thanks.
Don’t worry too much about the recession fears. The financial press needs to sell an audience yeah. If you’re using android, stick with sms until we can figure out what’s happening with push and android.
appreciate this. what’s your take on just the general status of the market – just off ATHS, haven’t seen a real correction in over 2 years. everyone everywhere saying we are due for a big one. trump seemingly causing chaos everywhere. what’s your updated take there on the future outlook?
Google oversold on the daily and hourly. It can’t get a grip.
tesla is now around 290. are you considering going long?
Hi Sam,
Were there any indicators / tells you used when you decided to purchase your TSLA 360-380 spread purchase later into the trading day? Specifically, how did you time your entry intraday so well? I’m asking because I was not so great in my timing as I entered around the 300 mark and wanted to pick your brain on your thought process for future reference.
So we already added yesterday at $300. So we just simply weren’t going add against at $300. We’re merely spacing out our entries. It’s still very much oversold. So it’s more about spacing entries than anything. Also, that 40% mark is significant.
will post a new comment. what’s your take on just the general status of the market – just off ATHS, haven’t seen a real correction in over 2 years. everyone everywhere saying we are due for a big one. trump seemingly causing chaos everywhere. what’s your updated take there on the future outlook?
So we just did recently have a big correction in July – August. 16% is larger than usual. You get any bigger than that and we’re talking bear market or other major event like the covid crash.
The biggest multi-month correction that wasn’t a crash or bear market was 2019. That QQQ fell 30% but over a very long period of time and with big rallies in between. It was just kind of a downtrend.
We also had a similar sell-off like that in 2018.
In terms of what we’re doing here, our long-term portfolios are long-term. We hedge them out and stay long.
the biggest risk to our overall strategy is a major correction blindsiding the trading portfolios. But even then, you have ultra near-term indicators that lead to rebounds even in the worst market conditions.
I think during this correction we probably allocated a little more than I would have liked. I think at this point until we get another intermediate-term rally, we’ll probably stay at half allocation. That’s how you combat major sell-offs.
But as I mentioned above and in the past, near-term oversold indicators and rebounds WORK as intended in a bear market. Here’s the 2022 bear market where the QQq fell 40%. Notice how you could trade virtually EVERY time the QQq reached oversold. See the attached. From the top of the chart to the bottom of the chart is -30% on the QQQ. Notice the oversold set-ups:
gotcha. thanks. do you think / suspect we are entering one or do you think this is something more minor?
So far we have no evidence that we are. This selling is not the type of selling we normally see in a bear market. The Vix is barely up. We’re only down about 5-6% from the highs. Usually we get much much heaver selling. 3-4% in a day heavy. we’re getting 1-2% sell-offs. So far normal.
appreciate this. thanks
Hopefully about to get some good news and kickstart this thing…
Market is moving up after hours due to NVDA excellent earnings. I hope we will get a nice rebound to start layering/trimming our positions.
Hello, Would you mind sharing settings for your charting software, I use trading view and couldn’t get same view as yours , I even took barchart subscription, even their same.. Couldn’t get similar view as yours.
stockcharts.com
APP, which is on your momentum watchlist, has been beaten by short sellers and their communication campaign.
https://ca.finance.yahoo.com/news/applovin-sinks-20-short-sellers-145901512.html
It closed at 38 RSI daily with a doji and sits at 37% off its recent high.