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Put Options on CREE on 6/29/2015

Bearish Flag on CREECree, Inc. (CREE) develops, manufactures, and sells lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, Taiwan, and internationally.

The company’s LED Products segment provides blue and green LED chips that are used in various applications, including video screens, gaming displays, function indicator lights and automotive backlighting, headlamps, and directional indicators; LED components comprising packaged LED products for lighting applications, and surface mount and through-hole packaged LED products for video, signage, general illumination, transportation, gaming, and specialty lighting applications; and silicon carbide (SiC) materials, which are used in manufacturing products for RF, power switching, gemstone, and other applications.

Its Lighting Products segment offers LED and traditional lighting systems for use in settings, such as office and retail space, restaurants and hospitality, schools and universities, manufacturing, healthcare, airports, municipal, residential, street lighting, parking structures, and other applications. This segment sells its products to distributors, retailers, and customers.

The company’s Power and RF Products segment provides SiC-based power products, such as Schottky diodes, SiC metal semiconductor field-effect transistors, and SiC power modules that are used in power supplies in computer servers, solar inverters, uninterruptible and industrial power supplies, and other applications; and RF devices, including a range of GaN high electron mobility transistors (HEMTs) and monolithic microwave integrated circuits (MMICs) for military, telecom, and other commercial applications, as well as provides foundry services for GaN HEMTs and MMICs that allow customers to design their own custom RF circuits.

Shares have formed a bearish "flag" and lower share prices are expected for this stock.

 

52-Weeks Trading Range: $26.86 - $53.33

Last Trade: $27.00

Trade

  • Buy 1 July $27.50 Put at $0.70
  • For a net debit of $0.70

Profit/Loss Analysis

  • Breakeven at $26.80
  • Maximum profit is unbounded
  • Maximum loss is ($70.00) at strike of $28.00

Closing Summary

  • Sold 1 July $27.50 Put at $2.40

Position closed on 7/9/2015 at price of $2.40 with a 242.86% gain in 10 days.

Updates

7/9/2015 10:55:40 AM

We are taking profits on CREE July $27.5 Put. Bought at $0.70, Closed at $2.40.

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