Options Strategist
Summary: Explore the efficiencies of swing trading semi-conductors using options versus stocks, with a detailed comparison using the VanEck Semiconductor ETF in light of NVIDIA's upcoming earnings release.
Important note: the strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.
Bullish put credit spread
Characteristic | Bullish Put Credit Spread | Buying the Stock/Etf |
|---|---|---|
Maximum Profit | Premium received | Unlimited |
Maximum Loss | Difference between strike prices - premium received | Amount invested |
Risk | Limited | Potential for larger losses with significant price drops |
Profit Potential | Limited to the premium received | Unlimited |
Time Decay (Theta) | Benefits from time decay | Not applicable |
Dividends and Voting Rights | none | Entitled to dividends and voting rights |
Complexity | Moderate due to multi-leg nature | Simple |
| Characteristic | Bullish Put Credit Spread | Buying the Stock |
|---|---|---|
| Position Details | Sell to Open SMH Put 15-sep-2023 strike 140 | Buy to Open SMH 100 @ $145 |
| Initial Capital/Investment | $2,900.49 (Margin requirement) | $14,500 (invested) |
| Maximum Profit | $1,305 | $2,500 (Based on Take Profit of $170) |
| Maximum Profit % | 44.99% | 17.24% |
| Maximum Loss | $3,195 | $1,500 (Based on Stop Loss of $130) |
| Risk | Limited to $3,195 | Limited to $1,500 based on the stop-loss |
| Profit Potential (% of Initial) | 45% (of the margin requirement) | 17.2% (based on the take profit) |
| Dividends and Voting Rights | none | Entitled to dividends and voting rights |
| Complexity | Moderate | Simple |
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
