• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (AMAT) February 9, 2022 - SELL-TAKE PROFITS

Tech Alert

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.


Alert

 

Tech Alert - Applied Materials, Inc. (AMAT) –TAKE PROFITS

SELL Applied Materials, Inc. (AMAT) February 2022 $110 - $115 in-the-money vertical BULL CALL spread at $4.95

Closing Trade

2-9-2022

expiration date: February 18, 2022

Portfolio weighting: 10%

Number of Contracts = 25 contracts

This trade has not only been a home run but a grand slam.

We executed a deep-in-the-money bull call spread at the height of volatility when Applied Materials (AMAT) was trading in the mid-$120s.

Since then, semiconductor stocks and the rest of tech have exploded to the upside making this trade that was quite aggressive at the time look like easy pickings.

We ended up stomping out our TXN call spread because of bad price action, but even that has reversed sharply.

AMAT is up over 3% and rising this morning and the risk/reward of holding until maturity isn’t worth it. We are taking profits and leaving 5 cents on the table for the next guy.

Why like AMAT?

Applied Materials is one of my favorite semiconductor fab companies and we did a few call spreads in this name last year with great success.

There’s not much to dislike with AMAT.

They boast a quarterly EPS of around $2 and last year scratched out $6 billion in profits. In short, they make a lot of money for what they do, and they are good at what they do, never a bad thing in a trading environment where balance sheets finally matter after a generation of easy lending to zombie companies.

This is really the gold standard of chip manufacturing services, at a time when every tech company is clamoring for more chips, including China, and I will hide out in strong balance sheets until the trading environment becomes more favorable to riskier companies.

I, therefore, bought the Applied Materials (AMAT) February 2022 $110-$115 in-the-money vertical Bull Call spread and am now taking profits.

Here are the specific trades you need to exit this position:

Sell to Close 25 February 2022 (AMAT) $110 call at....………$32.80

Buy to Close 25 February 2022 (AMAT) $115 call at………….$27.85

Net Proceeds:……………………..…….………....................…….....$4.95

Profit: $4.95 - $3.85 = $1.10

(25 X 100 X $1.10) = $2,750 or 28.57%

 

 

 

If you are uncertain on how to execute an options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2022-02-09 11:35:312022-02-09 11:35:31Trade Alert - (AMAT) February 9, 2022 - SELL-TAKE PROFITS

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Trade Alert - (LYFT) February 9, 2022 - SELL-TAKE PROFITS Link to: Trade Alert - (LYFT) February 9, 2022 - SELL-TAKE PROFITS Trade Alert - (LYFT) February 9, 2022 - SELL-TAKE PROFITS Link to: February 9, 2022 - Quote of the Day Link to: February 9, 2022 - Quote of the Day February 9, 2022 - Quote of the Day
Scroll to top