Oops, I did it again... Learning from the mistakes of others

Dough has been an invaluable place to learn from the mistakes of others without having committing my capital in it's endeavor.

Once again, our favorite trader Robyn, has done it with yet another earnings play. This time it is the video card manufacturer Nvidia. Anyone growing up in the 90s knows the importance of this company. Back in the day 3D Fx was a player on the graphics card platform. They had some really great ideas such as SLI by linking two graphics cards together for additional parallel processing power. Alas 3D Fx couldn't keep up with the bigger players such as ATI (AMD) and Nvidia (NVDA) and got acquired by the latter in 2002. Nvidia graphics cards all of a sudden had SLI power and a new market segment was formed. Again, I digress...

She sold a strangle, yet again, for 7AUG 19P and 22.5C. The MMM on this is 1.473 and it closed at 20.45 today. That means the stock can go up or down, priced by the market, 1.473 [18.977, 21.923]. That's all good because here is the analyze tab from ToS:

(click to enlarge)

 She stands to make $40 while risking $2366.28. That's a 1.6% ROC. The current price of NVDA is at 22.6-7. At $22.6 she stands to make nothing and at $22.7 she is -$5.38.

Good trade, bad trade should run a few segments on her because she is also responsible for the "I'm Ready to Start" show. They also have 9 reasons that new traders should follow her into the fire as well:

https://www.dough.com/blog/9-reasons-new-traders-should-follow-robyn

Robyn is a "neutral" trader, she takes advantage of theta, trades high IV rank (debunked on 29JUL15 MM segment), # of occurrences bringing her broker the commissions...

#5 - Massaging trades into winners, #6 - Trading underlyings that she doesn't know, #7 - Plenty of Earnings plays...

Those are three reasons why a trader should NEVER follow her in the first place. You NEVER trade things you don't know, never massage losers in hopes of recovering a dog shit position, and never play earnings on stocks you don't know or don't play them at all! Refer to my strategy on post-earning plays which I consider to be significantly safer than pre-earnings.

Stay strong and trade with a clear mind.