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Call Spread on AVGO on 4/21/2015

Bullish Cup & Handle on AVGO with 50-day MAAvago Technologies Limited (AVGO) is engaged in the design, development, and supply of analog semiconductor devices with a focus on III-V based products.

Its product portfolio comprises RF power amplifiers, RF filters, RF front end modules, ambient light sensors, low noise amplifiers, proximity sensors, multimarket-wave mixers, diodes, fiber optic transceivers, serializer/deserializer ASICs, optical laser and receiver components, motion control encoders and subsystems, optocouplers, LEDs, and industrial fiber optics.

The company’s products are used in cellular phones (iPhones), consumer appliances, data networking and telecommunications equipment, enterprise storage and servers, data communications, smart phones, base stations, core routing and transport, in-car infotainment, motor controls, factory automation, displays and lighting, power isolation, power conversion, and renewable energy systems applications. It markets its products through a network of distributors and its direct sales force worldwide.

The company sells products to original equipment manufacturers of wireless communications, wired infrastructure, industrial and automotive electronics, and consumer and computing peripherals markets.

Shares have formed a bullish "cup & handle" and higher share prices are expected for this stock. Note that shares are now sitting at their 50-day moving average.

 

52-Week Trading Range: $60.01 - $136.28

Last Trade: $123.00

Trade

  • Buy 1 May $125.00 Call at $3.20
  • Sell 1 May $130.00 Call at $1.60
  • For a net debit of $1.60

Profit/Loss Analysis

  • Breakeven at $126.60
  • Maximum profit is $340.00 at strike of $130.00
  • Maximum loss is ($160.00) at strike of $125.00

Closing Summary

  • Sold 1 May $125.00 Call at $1.00
  • Bought 1 May $130.00 Call at $0.01

Position closed on 5/14/2015 at price of $0.99 with a -38.13% loss in 23 days.

Updates

5/14/2015 12:25:15 PM

We are closing AVGO May Call Spread Options at $1.00 to minimize our losses. This contract becomes worthless tomorrow at the close!

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