Mike Khouw has a low-risk options strategy for you. He wants you to survive Nvidia earnings and trade war tape bombs. He thinks you need protection. He thinks you're scared.
You are scared.
The headline calls this a simple strategy. Simple is what you tell someone before you take their money. Low-risk means you'll lose slower. The next few weeks will feature Nvidia announcing numbers that algorithms already priced in three days ago and trade war tape bombs that mean nothing because tariffs get walked back every seventy-two hours depending on which geriatric remembered where he put his reading glasses.
Khouw's strategy probably involves selling premium or buying spreads or some other configuration that caps your upside at 4% while your downside remains bankruptcy. This is the options equivalent of wearing a seatbelt on a park bench. You're protected from nothing that was ever going to happen.
Retail traders will hear "low-risk" and immediately risk their entire account. They'll leg into the trade incorrectly. They'll panic when Nvidia moves 2% after hours on a rumor from a verified Twitter account with six followers. They'll close the position for a loss thirty minutes before it would have printed. Then they'll blame Mike Khouw personally.
The real strategy for the next few weeks is the same strategy for every week. Turn off CNBC. Stop checking your phone. Let the chart do what it was always going to do without your participation. But that doesn't make for a segment.
Mike Khouw knows this. He's not stupid. He's just employed.
The best bet this week is realizing that tape bombs stop being bombs when they drop every sixteen hours and everyone just keeps walking to Starbucks anyway.
Photo by Mariia Berezovsky on Unsplash
Leave a Comment