QCOM – Qualcomm, Inc. – The manufacturer of digital wireless telecommunications products realized a 1.25% decline in the value of its shares this afternoon to trade at $35.14 just after 2:50 pm (ET). Despite the pullback in the price of the underlying stock, one optimistic options investor appears to have enacted a bullish risk reversal in the October contract. It looks like the options strategist sold 14,000 puts at the October $30 strike for a premium of $1.01 apiece, and purchased the same number of calls at the higher October $40 strike for a premium of $0.66 each. The transaction yields a net credit of $0.35 per contract, for a total of $490,000.00, which the responsible party keeps in full as long as Qualcomm’s shares exceed $30.00 through October expiration. Additional profits are available in the event that QCOM shares surge more than 13.8% to trade above $40.00 ahead of expiration day.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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