QCOM Options on a Massive Fire Sale

Andrew Giovinazzi

BY ANDREW GIOVINAZZI

November 12, 2023

Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.

Have a stock YOU want us to review? Email my team here. – Mark

Hey Trader,

In case you missed it on Friday, semiconductor stocks are making a comeback in a big way. We don’t even have Nvidia Corp (Ticker: NVDA) earnings out and all the other chips are running. The one thing with the old line chip makers is that their option can trade relatively cheap.

Qualcomm Inc (Ticker: QCOM) has a 3 month range of $135 to 105. That is 30% at least from the lows so the stock can trade in relatively wide moves with a long enough time frame.

If you have the Option Pit App, you can catch our class on Monday to set up a trade in QCOM. Call 888 Trade 01 to ask for the App as an OP Subscriber.

How do those long term options price?

2 year lows is what I see

Options are not pricing QCOM like it just had a $30 range. It is pricing much less of a range. In Delta Strike Mark and I bought longer term options in QCOM just on the very low cost of the options.

30 day and 60 day IV in QCOM

I like long delta strangles in QCOM here. Dec or later. QCOM also pays a nifty $3.20 per year in dividends so it makes a nice long stock, long strangle alternative. When the IV is this low, I buy all the duration I can.