UPDATED - MAY 14, 2018 - MONDAY
BotTrigger Trade Alert: $NVDA sold remaining position of our May 18th $240/$250 call spread here @ $9 even, a 246% gain since our $2.60 entry.
After 3 different alerts sold @ different position sizes, our net gain on the total trade is a 120% gain. At this point, there's no point in holding out till May 18th expiration as even if NVDA closed out the week @ or above $250, which would increase the value of the call spread from $9 to $10, the increase in our weighted sell price would only go up from $5.72 to ~$6. What's more, why take the risk of NVDA closing the week out $245 for example...that would decrease the value of the spread to $5. Point is, we've gotten plenty out of this trade. Let's now focus resources on a better rotation into a more conservative call-spread.
We're currently holding the December $250/$260 call spread from our $4.98 entry. We're going to wait for the next pullback before adding anymore to this one as odds are we'll likely be able to get this discounted somewhere from $4 to $3.50 on the next pullback cycle. Pullback or breakout...we just need to wait for NVDA to setup again. No edge buying anymore up here just yet.
UPDATED - MAY 9, 2018 - WEDNESDAY
BotTrigger: $NVDA UPDATE - The remaining allocation (1/4th) on our May 18th $240 / $250 Call Spread is now trading around $6.40 in value ( 146% gain ) as NVDA flirts with it's all time highs here around the $285 area. Take notice of the technical progress NVDA has thus far made from that April 26th reversal where we first entered the trade.
We're above a key descending trend line that has been part of a larger symmetrical triangle pattern that has cultivated on NVDA - now a feather away from authoritatively clearing the $285 area. Something that's important to distinguish here going into earnings tomorrow, May 10th AMC (after market closes) is the following:
1.) The technical setup that has cultivated on NVDA is entirely different than where TSLA was going into earnings. We sold our TSLA calls before earnings largely b/c we were @ the break even point to close them out unscathed & TSLA wasn't sitting right near all time highs....it was in battle-zone territory that had the earmarkings of a bottom, yes...but it still had a lot of supply issues to chew through for the longer term picture; we were holding near-term calls that were a week away from expiration and so we reduced our exposure to risk by closing them out prior to earnings.
2) With NVDA here at ATH (all time highs) however, there are no losers on this stock right now....everyone who has bought shares or long calls for example....are all nearly winners. No losers on a stock means that there is going to be less supply concerns from unhappy long holders. Also, we've been selling tranches of our original position in profitable stages. With only 1/4th of our original allocation on this call spread left....we're inclined to hold onto it into earnings.
Now this does't necessarily mean that the above conditions = guaranteed upside. But it does at rocket fuel to the setup. Very simply put, if NVDA reports solid numbers that are even in-line...we're likely to see a breakout to above $285 as the upside momentum continues.
However, I want to make clear that if we haven't been selling in stages already, we would most certainly be closing out that call spread effective today. The position is already up substantially around 145% in gains. Don't be greedy with this one if you're holding the May call spread. If you're in January or later than riding them through would be ideal. But if you're in the May spread and haven't sold any of your position yet...this is a perfect place to show some gratitude and ring the register.
UPDATED - April 26, 2018
BotTrigger: Trade Alert $NVDA bought the May 18th $240 - $250 VERTICAL CALL SPREAD @ $2.60. The breakeven on this position is if NVDA closes @ minimum of 242.60 UPON the May 18th expiration. The max value of this spread stands to make a 285% gain so long as NVDA closes @ or above $250 by May 18th expiration. The all time high on NVDA is $254.50. With earnings right around the corner on May 10th, we've elected to purchase a call spread that expires a week after on May 18th. So if NVDA closes at or above $250 upon expiration then that $2.60 cost would turn to $10 max (difference between the 2 call strikes) so long as share price reached at least $250 upon expiration. NVDA has a very strong reversal today as AMD just reported record earnings. Do the math on this one...not only do we have a strong technical reversal but it's happening off the back of a very bullish report from underdog AMD. Leaders will always lead and AMD is it's bell weather.
UPDATED - January 19, 2018
BotTrigger Trade Alert: $NVDA adding more exposure via the January 2019 $160 strike call options filled @ $80 with these LEAP options. So we already purchased the June $155 call options back on December 21st due to technical oversold conditions. Those options are now +75% higher in gains. So why don't we just add to the June call options? Because the setup is entirely different at this point which means that we lean on more conservative exposure up here in anticipation that a pullback is normally part of how we stair-step higher. However, we may not get that pullback, so we need to hedge both to the upside and downside along the near term time frame. Buying the leap call positions that expire in January of next year gives us that. We have a breakout to all time new highs above the last pivot high but this is more in the overbought territory. That we've broken above yet another mountain peak is showing you that the dips on NVDA continue to get bought. This trend has no intention of slowing down due to everything we've outlined in the below post. Until Blockchain get's super green & enters the Tesla like energy efficient era .... those graphic cards are the requisite picks & shovels for every blockchain miner out there. They are still sold out at nearly every retail & any that are found are exorbitantly above retail cost.
BotTrigger Stock Trade Alert: $NVDA bought the June $155 strike call options filled @ $47.30 for a 3% starting allocation. Our plan is to add to this & build it as another core position that is aligned with our Blockchain Proxy Stack of investments that now include our 3 horsemen: $MGTI, $OSTK, & $NVDA. If you've been kicking yourself for missing the Cryptocurrency Bitcoin & Blockchain boom, Nvidia is uniquely positioned to be the master key position to all things blockchain. Cryptocurrencies all need the same things to function. They all need encryption, computer networks & high-powered internet servers. Whether crypto markets go up or down...the space will only continue to grow as the requisite Blockchain infrastructure is tooled into the plumping of economy. And who is the major winner in this whether up or down? NVIDIA is. They supply the graphic cards which facilitate & verify the lion share of all blockchain transactions. They are back ordered to the tilt for a reason. Full post below
*Note - Alternatively, one may opt at buying the common stock in lieu of the call options. So simply buying the stock itself is friendly and especially more conservative. It's entirely investor preference. We've elected for deep-in-the-money call options since they're a fraction of the cost & will sizeably outperform in gains along this uptrend. For example, a share price of $250 by June expiration would make these call options worth around $95 per contract which would represent a 100% gain on our position for a stock that moved up 27% from it's current share price. Farther along, we may add further exposure by doing a call-spread based on how the stock trades. For now, these DIM call options are our derivative of choice.
Our goal here at BotTrigger is to hunt Alpha / Yield / Gains wherever that occurs contingent that said positions have extraordinary fundamentals + ripe technical setups on the charts that are BUILDING CAUSE (cultivating) and setting up to breakout higher. Everything that we focus on when we declare a long position on is predicated around this as a requisite ... buying the companies/coins with strong fundamentals that are benefiting from strong tailwinds in their narrative backdrop. We take a holistic approach both technically and fundamentally.
Stocks that have great fundamentals & where the narrative backdrop is an en-vogue play = stocks that have great charts.
You've seen us go through cyclical tempos where we thematically covered AAPL and adamantly went on record with a series of analyses showcasing evidence both technically & fundamentally that this sub 100 level was grossly undervalued and how the technical setup here was building cause for higher. We posted at least a dozen+ solid posts surgically explaining why the bottom was in on AAPL. Our first buy alert was around the $96 area in the late summer of 2016 and since then we kept on adding in a number of places in mixture of both the common stock & call option spreads. That was the strongest theme of 2016 and early 2017 ...along with some notable others such Alibaba, WYNN, Boeing, Intuitive Surgical. We did our homework early and got paid later. That's how this works most of the time. With most of those near all time highs, we have either significantly reduced in size or completely closed out. Not that the above mentioned don't have room to run higher. They most certainly will. That's all AAPL, AMZN, NFLX any great majority of companies really does...is trend higher. However, the value proposition changed based on where the next big growth push is.
That narrative has since shifted towards positioning the portfolio for the next great growth cycle and we're clear that one of the most dominate themes of 2018 will be centered around Blockchain & Cryptocurrency adoption accelerating across a trillion dollar market cap. This year alone, the cryptocurrency market cap went from $17 Billion at the start of the year to a high mark near $650 Billion. That's nearly a 4000% increase on growth & capital inflows since the beginning of the year.
So ask yourself....how likely is it that we'll see the cryptocurrency market cap cross over the $1 Trillion level. We think very likely. This space is barely getting started. Will see hellacious, gut-wrenching corrections along the way, YES absolutely. Bitcoin is now on it's 7th correction this year alone - more on that in a separate post. Bet net-wise, crypto is here to stay and the inflows have the potential to easily rival the $1 Trillion club of capital markets.
The point here is this, there's lots of room for growth. We believe the crypto market is barely just getting started. We're thinking 5 years out. The pullbacks and correctional periods here will be short lived.
And so this is precisely why we've started to build a core portfolio that gives us exposure to the growing blockchain tech space. We did this by building up a Blockchain Proxy Stack of investments that gave us exposure to the growing cryptocurrency market that now includes $MGTI & $OSTK. MGTI is now among the largest Bitcoin mining farm in north America & only getting more private & public investor interest as they continue to scale their operations.
$OSTK Overstock is also big part of our Bitcoin/Blockchain Proxy Stack as we were early on their discovery that they were setting the stage for others to follow when they announced that they've integrated expansion beyond the acceptance of Bitcoin for payment and to now include Litecoin, Ethereum, NEM, Monero & 40 other alt coins via the Shapeshift gateway. This was a huge stance that Overstock's CEO, Patrick Bryne, was taking on as a testament to the growth & utility of accepting cryptocurrencies. This was just the first tailwind; the 2nd most radical innovation that Overstock was introducing was their roll out of the TZero ICO that is ongoing now as we speak:
TZero, at its core, is a SEC-regulated alternative trading system (ATS). Rather than depending on broker dealers to buy and sell securities, tZero works, in theory, like money sender Transferwise by matching buyers and sellers in a dark pool. The goal is to create an alternative to the NASDAQ with a ledger that is open, transparent, and immutable.
“I think it’s a historic event. We’re opening a new type of capital market,” Byrne told Coindesk.
And that is exactly how we're going to profit safely from the tremendous explosion in the cryptocurrency industry.
So you can see here that as the first SEC regulated crypto regulated trading exchange, Overstock's TZero is uniquely positioned to potentially being the future of where even the likes of AAPL and/or Netflix coins one day get traded. Beyond that, TZero may also be the portal gateway for the commencement where regulated ICO's take place, and trade freely thereafter. This is why we've made both MGTI & OSTK our largest 2 core positions in the BotTrigger Stock portfolio. But there is another one that we've been missing that we believe is the ultimate master key on banking on Blockchain cryptocurrency growth. In fact this one is uniquely special as it doesn't matter whether the crypto markets go through bear cycles or bull cycles...so up or down....it matters not for this one stock we're going to add back into the portfolio. You may recall we've owned this one before in several stages in the folio but this time we're staking a long term position and will be building this up as a core position. The horse was out of the barn in today's alert.
If you've been kicking yourself for missing out on the LIFE-CHANGING gains happening in cryptocurrencies right now, the most conservative play going into 2018 that is poised for extraordinary gains is going to be NVIDIA Corp $NVDA.
You see, cryptocurrencies all need the same things to function. They all need encryption, computer networks and high-powered internet servers. And they all require the same master key which allows them to facilitate and verify those transactions.
There are now more than 1400 cryptocurrencies, many of which, just like Bitcoin, are redefining everything we know about money… from saving and spending… to banking and finance lending… to investing & retirement, to total privacy around anonymous transactions from a booming sector of the cryptocurrency market known as privacy coins: such as Monero, Verge, Zcash, Zcoin, PIVX, Dash, CloakCoin etc. More on those later.
Incredibly, this Master Key is not owned by the folks behind Bitcoin, or Ethereum, or any of the others. It's totally separate, but it's used by virtually EVERY crypto in existence.
NVIDIA Corp. (NVDA) is a leading computer graphics company, making graphic processing units (GPUs) for consumers and businesses. From video games to professional visualization, datacenter and automotive applications like every Tesla built, NVIDIA's graphics cards enhance the processing capability of its users' computers. The company has been in the computer graphics business for more than two decades–it invented the GPU in 1999–so it is a well-established player. To date, NVIDIA owns 7,300 patents relating to computer graphics, the largest portfolio of its kind.
This is an excellent business on its own, but what is turbo-charging $NVDA's stock is the company's blockchain technology graphic cards that are required to process the majority lion share of transactions that occur on the Blockchain.
To break it down into the simplest explanation possible, blockchain allows a transparent and secure record of transactions that are critical to making cryptocurrencies function. NVIDIA uses it's new GPU technology to create "crypto cards" that are used by cryptocurrency miners.
Think about it like this, during the the Gold rush era of 1849, who were some of the biggest winners during that period of time? Was it the gold miners or the pick & shovel merchant? NVIDIA is providing the picks and shovels of the next big gold rush....CRYPTO BOOM
If you know anything about the gold rushes that happened in the United States, hoards of people moved west in search of gold and to make their fortunes. The vast majority of miners failed to meet their goal, but those entrepreneurs that were on the front lines selling the picks and shovels needed to mine the ground made a lasting fortune. They profited from each new wave of prospectors with gold fever.
NVIDIA added $501 million in its 3rd quarter of 2018 just from its GPU cards alone, with total revenue that came in at $2.64 Billion. And the trend is only getting started. In addition to the cryptocurrency trend, mainstream banking institutions are realizing the value of this technology and are also utilizing it in their accounting.
Although we don't agree with all the talking points from this CNBC spotlight with Dan Niles from Alpha One Capital, the idea is thematically the same: bet on the companies supplying the picks & shovels that are required in building out the blockchain economy. According to Dan, the strongest beneficiaries will be the exchanges & companies like IBM. We don't disagree there. Overstock's TZero exchange is a check on the list. IBM is another strong consideration. Dan is less inclined on betting on Nvidia because of their 130% gain YTD - however we think he's underestimating the value of the bigger picture:
Judge for yourself; the way we see it, Nvidia is a league, blue chip growth play that is uniquely positioned to be one of the strongest beneficiaries of a growing cryptocurrency market. Whether or not crypto goes through a bear correction or moon-run higher makes no different to Nvidia, their back-log order for selling graphic cards is supply constraint as they can't make them fast enough to fill demand. Meanwhile, they're raising prices. With superior hardware tech to any other in the industry that is unmatched, this smells a lot like the iPhone growth cycle that Apple has been playing out since inception of the iPhone.
That's a quality problem to have.