Options Strategy For QUALCOMM, Inc. (QCOM), Bay Crest Bets Big On Stock

Bay Crest Partners Equity Derivatives Strategist Anshul Agarwal shared tips with viewers on how to play the “options market” in general given the near record highs observed on the S&P 500 (INDEXSP:INX) and drilled down into the prospects of the options put out by telecom infrastructure services provider QUALCOMM, Inc. (NASDAQ:QCOM).

QUALCOMM, Inc. (NASDAQ:QCOM)

Mr. Agarwal said that the market rally has been driven by strong earnings being reported by companies.

“Last week there were concerns about Geo-political concerns in Ukraine and Israel, but right now, as of today the markets is fully focused on earnings. Stocks are moving based on earnings and we are seeing huge moves in stocks where the implied moves are quite low,” he added.

Mr. Agarwal also gave specific trading tips to investors on QUALCOMM, Inc. (NASDAQ:QCOM).

“My strategy is a Call Spread, stock is breaking out from its six months range right now, based on some note by Cohen analyst yesterday. It was up 2.5% yesterday,” he said

Mr. Aggrawal also said that he wants to buy August 15 ’82.5 Call’ at 90 cents and sell 86 August 15 Call spread, and pay around 90 cents to a dollar for it.

He then went on to say that QUALCOMM, Inc. (NASDAQ:QCOM) stock moves by about 3.5 percent on an average post earnings and based on historical data for the last nine quarters, then the trade would give him a good risk reward.

QUALCOMM, Inc. (NASDAQ:QCOM) reported its third quarter results yesterday after the market close. The highlights of the results have been the $6.8 billion revenue generated by the company which was up by 9% YoY basis, and the GAAP EPS was $1.31, up by 46 percent on YoY basis and 15 percent on QoQ basis. QUALCOMM, Inc. (NASDAQ:QCOM) also raised its EPS guidance for the full year 2014.

Bay Crest’s derivatives analyst also went on to point out that large cap names like Apple Inc (NASDAQ:AAPL) and Microsoft Inc (NASDAQ:MSFT) were “moving less than the implied moves on upside.”  On being questioned by the Bloomberg TV presenter if this depicted a lack of clarity in the investor thought, Mr. Agarwal said that, “I think it is just people  trying to figure out at where the stock is going to settle, and they are playing to adjust their positions based on what places they have put on, ahead of earnings. Sentiment was bullish going in, but it turned out to be not so bullish as a result, initially the first reaction was to get out of positions and then to hedge in again.

Disclosure: none

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!