Hey Traders,
Last week we talked about the massive market crash that hit tech stocks hard.
I also told you how my weekly income strategy kept us safe from the bloodbath.
And after dodging that mess, I turned my attention to NVDA.
Because while everyone was panicking about AI news out of China and what it might mean for U.S. tech, I wasn’t about to get caught up in the noise.
I stuck to my system.
And once again, that system delivered a clean, easy win.
Let’s break it down.
The Trade Setup
On Tuesday, as NVDA was trading around $120.96, I put out this trade alert:
- Sell to open NVDA 01/31/2025 133 Call
- Buy to open NVDA 01/31/2025 134 Call
- Net credit: $0.06 or more
With just a $1.00 spread width, that 6-cent credit gave us a 6% return on risk in just three days!
And as always, the setup was simple:
As long as NVDA stayed below 133 by Friday’s close, we’d walk away with a win.
What Happened Next
Right after entering the trade, NVDA started climbing.
Not surprising. After all, the stock had just gapped down 12% over the previous weekend. And if you’ve been following me, you know what I always say:
Gaps tend to get filled. So even though the stock moved against us, it wasn’t unexpected.
By the day’s end, NVDA had already pushed up to 129.
But that was about as high as the excitement got.
The momentum fizzled out fast. NVDA started sinking lower, then spent the rest of the week drifting sideways.
By Friday’s close, NVDA finished right around where we started on Tuesday.
Why This Trade Worked
Here’s the important part:
If we had traded this differently — let’s say we had bought puts — we would’ve ended up with a losing trade.
Why?
Because even though NVDA did move lower, it didn’t move fast enough or far enough to really make a put option gain any value.
But the way I trade?
→ I didn’t need NVDA to crash.
→ I didn’t need it to do anything spectacular.
→ I just needed it to stay below 133 — and that’s exactly what it did.
We closed out the week with a stress-free winner.
And on a week where plenty of traders were scrambling, that’s about as easy of a win as I can imagine!
Final Thoughts
Once again, this trade proves why I sell options instead of buying them.
I DON’T have to be exactly right about where the stock is going — I just have to not be completely wrong!
And while it might sound the same… it’s completely different — and that’s how we keep stacking the odds in our favor.
But here’s something even bigger to think about…
This is now the second Monday in a row where the market has gapped down at the open!
But guess what? Neither one of those Monday panics affected us at all.
Why? Because I stuck to our system by entering on Tuesday, having the trade automatically close on Friday and limiting our time in the market.
That means I completely avoid these weekend panics, Monday gaps, and all the noise that comes with them.
And that right there? That’s one of the big reasons this system works so well.
Stick with me, and I’ll keep showing you how to stack the odds in your favor — no matter what the market throws at us.
Trade well,
Jack Carter
P.S. Are you ready for Google earnings? Before you place a single trade, watch this now! (hint: the best earnings trade isn’t obvious)