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SBN Options Idea for December 2021

Market Summary:

The major indices are all trading lower at midday following a very active and mixed morning session on Wall Street, with all eyes on inflation and the Fed’s tightening plans. The Producer Price Index (PPI) and the core PPI both beat expectations by wide margins, coming in at 0.8% and 0.7% respectively, and the headline PPI was up by a yearly 9.6%, a new record, in November. The red-hot PPI report led to a surge in Treasury yields ahead of tomorrow’s crucial Fed decision causing the tech stocks and other rate-sensitive issues to face strong headwinds in early trading.


Suggested Option Trade:

Call (Bull) Debit Spread on Broadcom Inc. Establish Bull Call Spread on AVGO expiring February 18' 22 at $13 Net Debit

  • Trade:

Buy 1- February 2022, $600 strike call for $33.40

AND

Sell 1- February 2022, $630 strike call for $20.40

  • Allocation: Size the position according to your portfolio size and how much you're comfortable investing.

  • Price Guidance: Net debit of $13 or so.

  • Current Stock Price: $610

If AVGO trades over $630 at expiration, we will make a 130% profit. If it trades below $600 at expiration, we will incur a 100% loss. If it trades between the 2 strike prices, we will make a partial profit or loss. Be sure to close the trade before or closer to expiration!

You will need to manage the trade till expiration or closure yourself, and no further guidance will be issued. If you need any help, you may reach out to us. Disclaimer: Options trading involves substantial risk. The valuation of stock and options may fluctuate, and as a result, in some cases, members could lose more than their original investment. In no event should the content of this correspondence be construed as an express or an implied promise, guarantee or implication by StockBuzzNow that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. No guarantee of any kind is implied or possible where projections of future conditions are attempted.


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