The article is about people who are very smart with money (called analysts) and they think a company called Amgen will do well in the future. They also say that there is a way to make more money from this by buying something called options, which is like a bet on how much the company's stock price will go up or down. But it can be risky if you don't know what you are doing. The article also talks about some numbers and indicators that help people decide when to buy or sell Amgen's stock. Read from source...
1. The title is misleading and sensationalized, implying that there is a large amount of money being bet on Amgen options by smart investors, while the actual numbers show a low percentage (0.34%) of total trading volume. This creates a false impression of high demand and confidence in the stock.
2. The article focuses too much on technical analysis indicators such as RSI and price targets, without providing any context or explanation for how they are derived or what they mean for investors. These indicators can be manipulated to show any outcome, and do not reflect the true fundamental value of the company.
3. The article relies heavily on analyst ratings, which are often influenced by personal biases, conflicts of interest, and short-term market trends. Analysts may have different agendas or incentives for giving positive or negative recommendations, and their track record is not always accurate or reliable.
4. The article promotes Benzinga Pro as a source for real-time options trades alerts, without disclosing that it is a paid service that benefits from increased subscriptions and advertising revenue. This creates a conflict of interest and undermines the credibility of the information provided.
5. The article does not address any of the risks or challenges facing Amgen as a company, such as regulatory issues, competitive pressures, litigation, patent expiration, or environmental concerns. These factors can have a significant impact on the future performance and profitability of the stock, and investors should be aware of them before making any decisions.
To provide you with the best possible advice, I will consider various factors such as the current market conditions, the company's financial health, the analyst ratings, the options trades, and my own AI capabilities. Based on these criteria, here are some possible scenarios for investing in Amgen (AMGN) options:
- Scenario 1: Bullish on AMGN - If you believe that Amgen will continue to perform well in the near future, you could buy call options with a strike price close to the current market price and an expiration date of at least one month. For example, you could buy the AMGN Sep $320 call for $15.70 or the AMGN Oct $330 call for $9.20. These options would give you the right to purchase shares of Amgen at a specified price in the future, and if the stock rises above those prices, you could profit from the difference. The main risk here is that the stock might not move as expected or the market conditions might change unfavorably, causing your options to expire worthless or lose value. To hedge against this risk, you could also buy put options with a strike price higher than the current market price and an expiration date of at least one month. For example, you could buy the AMGN Sep $330 put for $2.10 or the AMGN Oct $340 put for $4.50. These options would give you the right to sell shares of Amgen at a specified price in the future, and if the stock falls below those prices, you could profit from the difference. The main risk here is that the stock might not fall as expected or the market conditions might change favorably, causing your puts to expire worthless or lose value.
- Scenario 2: Bearish on AMGN - If you think that Amgen will decline in the near future, you could sell call options with a strike price above the current market price and an expiration date of at least one month. For example, you could sell the AMGN Sep $320 call for $15.70 or the AMGEN Oct $330 call for $9.20. These options would give other investors the right to purchase shares of Amgen at a specified price in the future, and if the stock falls below those prices, you could keep the premium as income. The main risk here is that the stock might not fall as expected or the market conditions might change favorably, causing your options to gain value or be exercised. To hedge against this risk, you could also sell put options with a strike price below the current market price and an expiration date of at least one month. For example, you could sell the AMGN Sep $310 put for $4.50 or