Trade Alert: Buy Calls on NVIDIA

A new trade was just triggered for us!

After yesterday’s closing bell, NVIDIA Corporation (Nasdaq: NVDA), which designs graphics-processing units, reported blowout third-quarter earnings. In fact, its earnings per share (EPS) topped Wall Street’s estimate by a full 38%.

That news caused the stock to jump by more than 22% on today’s open — which surpasses our parameters for making the trade.

Based on our extensive research into how this stock performs given our set of parameters (climbing between 1.12% and more than 42%), we know NVIDIA’s stock should rise from now over the next two months. With call options, we could magnify those returns into the triple digits.

So to benefit from this earnings drift uptrend, let’s buy the January call options today.

Action to Take
Buy Action to Take
Stock: NVIDIA Corporation (NVDA)
Option Type: Call Option
Expiration: Jan-20-2017
Strike Price: $85
Option Symbol: NVDA170120C00085000
Action: Buy to Open
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $6.10
Trade Deadline: If your order is not filled by my next update, I will update you on the trade.
Note: Do not place a market order. Set the limit order at $6.10.
Once this order is filled, place the following order:
Sell Action to Take
Stock: NVIDIA Corporation (NVDA)
Option Type: Call Option
Expiration: Jan-20-2017
Strike Price: $85
Option Symbol: NVDA170120C00085000
Action: Sell to Close Half
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: Whatever nets you a 50% gain.
Trade Deadline: Keep this order open until it is filled or canceled.
Note: This second order will allow us to collect a 50% gain on half of our position in the event that a quick move happens before I can get a trade alert out to you.

That’s all for now; talk to you again next week.

Until next time, good trading…

Jeff Opdyke
Editor, Earnings Drift Alert