Backed Out Option Strategy and Trend Line Trading Guide under Inweida Stock Price Volatility

In recent times, YVida's share price has suffered severe setbacks, leaving many investors in a short-term predicament. How can you turn passive into proactive and achieve “hedging” or even gain using smart trading strategies? This article focuses on two main strategies: Covered Call options trading and trend-line trading techniques to help you adapt to market fluctuations.

1. Covered Call Strategy: “Boosting” tricks in Yinweida's stock price movements

Faced with the difficulty of having Inveida's share price below the purchase cost, adopting a Covered Call strategy is a wise choice.

The specific operation is as follows:

1. Strategy Core: Sell premium futures above the offer price and secure royalty income in advance.

2. Case Study: A hypothetical investor bought Inveida stock (100 shares) for $140, and the current market price fell to $118.11. By selling a $140 floating option that matures on July 4 (note that 1 option does not correspond to 1 share, but to 100 shares), an immediate $49 royalty, reduces holdings and provides instant cash flow.

How to make money with this strategy:

The key to the strategic monetization of this investor is based on the actual performance of the stock price and the state of the futures at maturity:

1. The share price does not exceed the exercise price: If on July 4, Yinveda's share price remains below $140, the option becomes worthless. This investor can retain the shares while retaining the royalties received, and his final income is: receiving the rights amount of $49 (pre-fee).

2. Share price increase: If the share price rises but does not exceed the exercise price, the option becomes worthless, the investor can still retain the shares, and the market value of the shares increases, plus the income from the royalties, and the overall profit may be realized. The final income is: Receiving the rights amount of $49 (before the fee)).

3. Share price exceeds the exercise price: If the share price exceeds $140, the option is very likely to be exercised and this investor needs to sell the shares at the exercise price. In such a case, this investor loses the gains that continued to rise in the share price, but has partially offset the loss through royalty income, and eventually the investor has been able to realize the guarantee at the cost price of $140 per share and collect the royalties.

So what's the risk involved:

1. Not suitable for investors in unsecured assets: If you do not have a subscribed asset, you need to buy it at the current market price and then sell it to the buyer of the option at a lower performing price. This spread (market price - execution price) multiplied by the amount of the futures contract is the loss you may face. If the price rises a lot, this difference will be large, leading to huge losses.

2. IF INVIDA'S MARGIN SIGNIFICANTLY EXCEEDS $140 PER SHARE, IT WILL LOSE MARGINAL GAINS OF MORE THAN $140 PER SHARE;

For such a quality company as Invida, do not sell an excessive amount of securities, otherwise it is easy to be hacked and damaged.

2. Trendline trading: Capture the short-term volatility opportunities of Inveida

The more people who walk have become the road. The market is made up of people, and technical analysis predicts collective behavior through historical price patterns. While multiple traders are watching the same indicator, such as the five-day line, their signals can trigger collective action to form self-actualized predictions and drive price movements.

And the five-day line, as a widely recognized trend indicator in the market, has a significant impact on market dynamics due to its universally accepted degree.

Trade with Trends:

Trend trading, in simple terms, is buying and selling in a major direction that follows the price of stocks or financial products.

The high and low lines of the price trend are linked. The upward trend line is from the low to the low, indicating that the buyer has the advantage and is suitable for buying when the price returns to near the trend line;

A decrease in the trend line high indicates that the seller is strong and can consider selling when the price rebounds to the trend line. If the price breaks above the trend line, a trend reversal may be predicted: an uptrend line is broken and is a sell signal;

The downtrend line is broken and is a buy signal.

Since technical analysis is more of a psychological layer of dependence, in technical analysis, short-term trends usually only work best when the first trend is touched, the second rule is weaker, and the more people who need attention will be better. We can see that the current support level is 30 Daily average (dark blue line, third line), resistance level is 20-day line (purple line, fourth line, slowest).

So we can look for some common market intelligence benchmarks and trade on Invida to grab some short-term opportunities.