I wrote a cash secured put on QCOM on Monday.

music selection:  “Ace of Spades” — Motorhead

Qualcomm is one of the Big Cheap Tech names I favor such as Apple, Cisco, and Microsoft.  These are companies with strong free cash flow, growing sales, fortress balance sheets, that are cheap after backing out the horde of cash they keep on the balance sheet.  They also tend to have fat options premiums despite their slow moving megacap status.  I previously had a written put on QCOM that expired worthless on Friday and I’m going to bat here again.

I was able to sell QCOM160422P00047000 for 65 cents a contract.  The trade will be in force for 40 days and yields 12.62% annualized.  I went a little out of the money for more downside protection on the continuing belief the market is guilty until proven innocent.  I’ll remain defensive until the S&P 500 closes above 2,131.  The trade has 11.24% downside protection before I could see unrealized losses.  I feel pretty good about my chances, especially since my ‘downside’ is owning a great company with a yield over 4%.

Devour your prey raptors!

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Written Put QUALCOMM Incorporated (QCOM)

Never miss another opportunity to devour prey!

3 thoughts on “Written Put QUALCOMM Incorporated (QCOM)

  • March 16, 2016 at 7:07 pm
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    Raptor,

    I’m curious to hear you comment a bit more on “I’ll remain defensive until the S&P 500 closes above 2,131”.

    If I went into a coma and woke up in 4 months and found out that the S&P 500 is at 2131 I’d be much more worried about the downside of a trade.

    Darren

    Reply
    • March 16, 2016 at 7:31 pm
      Permalink

      Darren,

      2131 is the old closing high. Until we breach that, the market is technically in a downtrend. Above that, an uptrend. That is the simplest form of technical analysis. I don’t have a crystal ball so I all I have to go on is the most recent high.

      Reply
  • March 17, 2016 at 9:25 pm
    Permalink

    Raptor,

    It looks like I’ll never do two things: get behind technical analysis or make a lot of money with options.

    Thank you for the response!

    Darren

    Reply

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