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.
It has been a good year for the technology sector, the largest sector allocation in the S&P 500. The tech-heavy NASDAQ-100 Index is up 8.7 percent while the Technology SPDR (ETF) (NYSE: XLK), the largest technology exchange-traded fund, is higher by 16.5 percent.
PSI, Ahead Of The Rest
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Semiconductor stocks have been big contributors toward the tech sector's upside this year, and that explains why the PowerShares Dynamic Semiconductors (ETF) (NYSE: PSI) is 2016's best-performing non-leveraged tech ETF with a gain of 46.4 percent.
PSI, which holds 30 stocks, is a smart or strategic beta ETF because its underlying index “is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value,” according to PowerShares.
Robust mergers and acquisitions activity has been a significant theme for semiconductor stocks and ETFs like PSI. As of early November, there had been about 20 chip deals this year worth more than $60 billion combined.
Holdings And Weight
While PSI does hold shares of Intel Corporation (NASDAQ: INTC) and other chip giants such as Texas Instruments Incorporated (NASDAQ: TXN), the ETF devotes 43 of its weight to large-cap stocks, which has proven to be an advantage at a time when smaller and mid-cap semiconductor names have been delivering some of the sector's best returns.
Over 22 percent of PSI's holdings are mid-cap chip makers and about 35 percent are small-cap names. However, PSI's exposure to smaller growth stocks does not drag the ETF's valuation to concerning levels.
For example, PSI sports a price-to-earnings ratio of 21.46 and a price-to-book ratio of 3.2. The comparable numbers on the NASDAQ-100 are 21.18 and 4.36.
Semiconductor Space
Benzinga recently reported: Semiconductor companies largely announced a slight earnings beat for Q3 and projected in-line guidance following a string of disappointing growth outlooks, while Q4 seems to be tracking modestly ahead of expectations, Bluefin’s Paul Peterson said in a report.
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.