Okay, so this article is talking about a company called Applied Materials. They make machines that help create computer chips. People can buy and sell parts of this company using something called options, which are like bets on how much the company's value will change. Some people who watch the market think that the price of these options and the company itself could go up or down in a certain range between $150 and $250 per share. The article also tells us what some experts think about this company and their predictions for its future price. They all have different opinions, but they agree it's not a bad idea to buy Applied Materials right now. Read from source...
- The article is written in a poor and confusing way. It uses too many technical terms without explaining them properly or providing context for the readers who are not familiar with options trading. For example, what does "whale trades" mean? What is the difference between calls and puts? How do volume and open interest relate to price movements? The article assumes that the reader already knows these concepts, which is a major flaw in the writing style.
- The article has a strong bias towards positive options trading outcomes. It only presents the ratings and target prices of analysts who are bullish on Applied Mat, while ignoring any contrary views or negative scenarios. This creates an unbalanced and misleading impression of the market sentiment and potential risks for investors. The article also fails to acknowledge that options trading is a high-risk activity that can result in significant losses as well as gains.
- The article relies heavily on emotional appeals and hype to persuade readers to follow the options trades of the "big players". It uses words like "frenzy", "eyeing", "powerful", "consistent", "reflecting" to create a sense of urgency, excitement, and authority. The article also implies that by following these trades, readers can achieve high profits without mentioning the risks or challenges involved in options trading. This is an irrational and deceptive argument that does not reflect the reality of the market conditions.
1. Buy AMAT calls at a strike price of $200 with an expiration date of June 17th. This option offers a high upside potential, as the stock is trading near its 52-week low and has strong support from key analysts who have set price targets above $200. The risk is moderate, as there is a possibility that the stock could continue to decline if the market sentiment remains negative. However, this option allows you to benefit from a potential rebound in the stock price, especially if AMAT announces positive earnings or other favorable news.
2. Sell AMAT puts at a strike price of $150 with an expiration date of June 17th. This option generates income, as you are betting that the stock will not fall below $150 by the expiration date. The risk is low, as you have the right to buy AMAT shares at $150 if the stock drops below that level. This option also provides downside protection, as it limits your losses in case of a further decline in the stock price.
3. Buy AMAT calls at a strike price of $250 with an expiration date of July 16th. This option offers a high leverage and unlimited profit potential, as you are betting that the stock will surge above $250 by the expiration date. The risk is high, as there is no limit to how much you could lose if the stock does not reach your target price. However, this option rewards you with exponential gains if AMAT announces a major breakthrough or positive catalyst that drives the stock higher.
4. Sell AMAT puts at a strike price of $200 with an expiration date of July 16th. This option generates income and provides downside protection, as you are betting that the stock will not fall below $200 by the expiration date. The risk is moderate, as you have the right to buy AMAT shares at $200 if the stock drops below that level. This option also allows you to participate in any upside potential of the stock, as you can sell the puts and simultaneously own the calls for a net debit of $50 per contract.