/biz/ - Business & Finance

>>50882032
Trade tight vertical spreads on NVDA. I trade 2.5’s almost every week. Try to find a risk/reward of 1.0 or greater. If it moves far against you but there’s still a couple days left you can close out early and not lose 100%.
NVDA closed at 187 today.
I bought these two debit spreads basically saying it’s either going to close above 195 or below 175 next Friday.
0.41 for each spread or 0.82 aggregate to make a max profit of 2.5 - 0.82 = 1.68 per spread per share. So $840 is my max possible profit and $410 is my max possible loss.
Depending on how NVDA moves Monday I’ll probably buy 5 more 2.5 spreads that are in between 175-195 depending on how the stock moves that day and then look to close the “wrong” direction spread a day or two later.

Being consistent with swing trading is much more difficult and nerve racking. Once the stock I’m trading moves well above the short leg in my spreads I sleep well at night and can chill knowing the spread is going to cash for max profit.