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This sector is clearly in an uptrend with higher highs and higher lows, rising 200 day moving average and rising 50 day moving average. Trade details: Sell the February 16, 2018 $98 puts on SMH for $2.30 use a limit order. You will receive a 2.3% upfront payout on your purchase obligation for agreeing to buy shares at a 1.5% discount to yesterday's closing price of $99.53. This represents a 14.8% annualized return over the two month holding period. If SMH closes below $98 on expiration day you will be assigned 100 shares of stock for every put sold at which point selling covered calls could be used to generate more income. For protection if the ETF falls below $92 per share (about 7% below yesterday's closing price) close the option position with a buy to close order. Use a hard stop on today's position at $92. Collecting large upfront payments has never been easier. |
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.