27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Chip stocks were trading mostly lower Friday after Broadcom Inc (NASDAQ:AVGO) issued a concerning second-quarter earnings report and cautious outlook.
What Happened
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On Thursday, Broadcom said it earned $5.21 per share in the second quarter on revenue of $5.517 billion. Street analysts were expecting the company to earn $5.18 per share on revenue of $5.69 billion.
On top of a the second-quarter revenue miss, Broadcom revised its full-year revenue outlook from $24.5 billion to $22.5 billion. The chipmaker cited a "broad-based slowdown in the demand environment" due to continued geopolitical uncertainties. The company also highlighted the "effects of export restrictions" on one of its largest customers — most likely China-based Huawei.
Why It's Important
Broadcom CEO Hock Tan said during the company's post-earnings conference call the chip environment is "very, very nervous."
In a Tweet, CNBC's Jim Cramer wrote the conference call was "truly depressing" and "not good for the group."
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What's Next
Broadcom said its customers are "actively reducing" their inventory levels. As a result, the company said it's now "taking a conservative stance" for the rest of the year.
Price Action
The following is a summary of how notable chip stocks were trading at the time of publication Friday:
- Broadcom: down 7.09%.
- Skyworks Solutions Inc (NASDAQ:SWKS): down 3.86%.
- Analog Devices, Inc. (NASDAQ:ADI): down 2.53%.
- Xilinx, Inc. (NASDAQ:XLNX): down 2.54%.
- Micron Technology, Inc. (NASDAQ:MU): down 2.97%.
- Texas Instruments Incorporated (NASDAQ:TXN): down 3.41%.
- Advanced Micro Devices, Inc. (NASDAQ:AMD): down 3.79%.
- Nvidia Corporation (NASDAQ:NVDA): down 3.43%.
- Qualcomm, Inc. (NASDAQ:QCOM): down 2.06%.
Related Links:
Analysts Discuss Broadcom's New Supply Agreement With Apple
With Semiconductor Demand Uncertain, KeyBanc Presents Stock Ideas
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.