Nvidia – strategies for the sideways market

Nvidia – strategies for the sideways market

The Nvidia share (ISIN US67066G1040) is trading at all-time high these days: At the peak, just under $ 364 was paid for one share. The company is one of the global market leaders in graphics processors and chips that do far more than speed up PCs and game consoles – they are used in the areas of artificial intelligence, autonomous driving, medical technology and robotics. Those who shy away from a direct investment in view of the high prices treat themselves to a safety buffer with discount certificates and reverse convertibles.

Nvidia over $ 350 in September – 10 percent buffer

If investors expect a continuous price development or even slightly increasing prices, they forego higher buffers in favor of the return: The SG discount certificate with the ISIN DE000SR761D1 offers a return of 33 at a price of 295.61 euros and assuming constant exchange rates Percent pa if the share closes on September 18, 20 above the cap of $ 360. Discount: 10.2 percent.

Nvidia over $ 300 in September – 20 percent buffer

Those who are more defensive will find a buffer of 20.7 percent at Morgan Stanley’s discounter (ISIN DE000MC872P3). At constant exchange rates, there is a return of EUR 12.70 or 14.5 percent p.a. in if the share is above the cap of US $ 300 on September 18, 20. Losses occur if the share closes below the purchase price of EUR 260.88 (approx. USD 286.20).

Nvidia always had over $ 260 through December – 28 percent buffer

There is more security with a barrier: The currency-secured bonus certificate with cap of SG (DE000SR8N873) at a price of 372.31 euros offers the chance of a (maximum) return of 57.59 euros or 26.1 percent pa and at the same time a comfortable buffer of 28 percent. When due, the product pays the bonus level (and cap) of 430 euros, provided the share price never touches or falls below the barrier of 260 euros until the valuation date of December 18, 2020. Surcharge only 3 percent.

CertificateReport conclusion: The currently high volatilities enable investors to rely on the sideways movement of the Nvidia share with attractive conditions. The discounters are not secured against exchange rates; the risk is that the euro will appreciate against the US dollar. Smart investors buy after the US exchange opens when liquidity is high and bid-ask spreads are potentially lower.

This contribution does not constitute a recommendation to buy or sell Nvidia shares or investment products in Nvidia shares. We assume no liability for the accuracy of the data.

Author: Thorsten Welgen


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