Pete Najarian Buys Nvidia ($NVDA), plus UOA Spotted In 3 EV Names

Pete Najarian Buys Nvidia ($NVDA) Ahead of Tonight’s Earnings

The chip stock, down 44% year-to-date, is about to report earnings tonight. And Pete Najarian is stepping in ahead of those earnings, announcing his purchase of $NVDA shares today during an episode of CNBC’s Halftime Report. Here’s what he had to say.

“Who knows what happens tonight with earnings Scott. […] I’ve always got my list out. On the list I had Goldman Sachs – we bought that about two months ago. Then it was Best Buy yesterday. And today, I’m looking at Nvidia ahead of earnings, and you know it’s a little bit dicey to do this, but when I look at the company, we all know the back story behind it. But it has not been this cheap — ever before. 

When you look at the forward PE of 30, and it’s actually trading presently at about 43, that was part of the rationale that I had as I was looking at this name. And look, one year ago today, this stock was trading at almost exactly where it is right now. It had a big run up into November, it was up over 330, and then it’s pulled back to this 165 level. By the way, that was almost exactly the price that I paid today — about $165.02.”

The Investment Committee Debates

Not everyone was on board with Pete’s purchase. Halftime panelist Steve Weiss offered a different opinion.

Here’s a clip of the debate from today’s show.

A key note from Pete’s trade: he defended his position. We don’t mean he backed up the reason he bought the stock, we mean he used $NVDA’s sky-high IV to gain protection from $10 worth of downside. He did that by selling the out-of-the-money $175 strike calls (worth $10 each) against his shares. That’s premium that Pete will get to keep regardless of what happens to Nvidia tonight. 

As Scott Wapner said, this is a typical piece of Pete’s strategy: Using options to limit risk to the downside while maintaining exposure to the upside. 

But this isn’t just one of Pete’s favorite strategies. It’s also a favorite strategy of the “smart money”. Listen to Pete break down the unusual option activity he’s spotted today in these three EV-related names.

Unusual Options Activity

Tesla ($TSLA)

Quantity: 10,000

Expiration Date: May 27th, 2022

Strike: $650

Premium: $10.00-$16.90

Total Cost: $13,450,000

$TSLA Stock Price: $639.00

Lucid ($LCID)

Quantity: 5,500 contracts

Expiration Date: June 3rd, 2022

Strike: $18.50

Premium: $0.56-$0.63

Total Cost: $327,350

$LCID Stock Price: $16.77-$16.91

Vale ($VALE)

Quantity: 5,000

Expiration Date: July 15th, 2022

Strike: $19

Premium: $0.51-$0.53

Total Cost: $260,000

$VALE Stock Price: $17.39

Listen to what else Pete had to say about today’s unusual option activity in the clip below:

The Final Trade

The Halftime Investment Committee gave these four stocks as their final trades:

• Charter Communications ($CHTR)

• T. Rowe Price ($TROW)

• Citigroup ($C)

• Short iShares 20+ Year Treasury Bond ($TLT)

Can you guess which one was Pete’s? Check out the clip below to find out!

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