Buying NVDA put contracts.

Nvidia Corp. (NVDA) is a leading semiconductor company focusing on high-end computer chips.The stock trended lower for much of the year as investors pulled out of high-growth / high-multiple stocks.

Shares of NVDA bottomed in October and have moved sharply higher alongside the current bear market rally.

At this point, NVDA is running into a key resistance area near where the stock topped out this summer and also close to the 200-day moving average. This marks a point where NVDA is likely to face selling pressure and possibly trade back down to test the lows.

Shares currently trade for more than 37 times next year’s expected profits — an expensive price tag at a time when Wall Street is moving away from high valuation tech stocks.

NVDA is vulnerable to what could be a sharp pullback — especially if this bear market rally runs out of steam. Plus, adding a new bear position to our portfolio helps add balance to our positioning after some great trades that capitalized on this bear market rally.

• Buy (to open) 4 NVDA December 16th $190 Puts
• Limit $28.00 or less
• The new position will represent roughly 8.3% of our Spec Model capital
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• 14:05 Adjusting limit price to $29.50 or less

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• Executed 14:07
• BOT 4 NVDA Dec 16th $190 Puts @ $27.99