Hey 5-Star Trader,
If you have followed me for a little while, you know that the semiconductor sector is one of my favorite industries to track. This is because I believe semis are the way of the future. They are a key component of many electronics that the majority of people use on a daily basis. Even your phone or computer could not work without them!
With so many companies competing to be top of the sector, how do you know which ticker you should trade?
Have You Heard Of QCOM?
QUALCOMM (QCOM) is a semiconductor company that I had my sights on earlier this month. Using my Hot Zone Indicator (pictured below), I began to look at QCOM historical data. From there, I decided to sell some neutral condors, with a slightly bullish slant at 190 — SELL -1 IRON CONDOR QCOM 100 (Weeklys) 4 FEB 22 190/205/190/175 CALL/PUT @11.15 limit order (LMT).
The idea behind this trade was to have QCOM stay around 190 so I could collect the decay in a quick overnight trade. My risk was about $400 (or 1.5%) and because it was an overnight trade no stops were placed.
Later on that same afternoon, my QCOM trade was getting thrown around by the market volatility. It went up, then promptly fell. However, finally, near the end of the day, price was able to stabilize to right around where it started before I got into the trade. This was exactly what I wanted to see in my iron condor trade.
The Next Day…
The next day at market open I checked my trade and saw good news. The overnight action kept my trade exactly where I wanted to be and I was able to make a quick 18% in less than 24 hours — BUY +1 IRON CONDOR QCOM 100 (Weeklys) 4 FEB 22 190/205/190/175 CALL/PUT @9.12 LMT.
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