On Thursday I posted that Broadcom (AVGO) announced a 10:1 split and I bought a 1 contract Call. The stock will be trading at the new split adjusted price on Monday, July 15th. With the stock at $1675 I bought 1 AVGO 7/26/24 $1680 Call. I went with the Expiration Date of July 26 just in case I held the position through the split, I would have a little breathing room before it expired in case the stock takes a little dip. Well, this morning the stock opened up again, about $60. I decided to take the profit. And it was a great profit, $7700.
6/13/24 – Buy to Open 1 AVGO 7/26/24 $1680.00 C @ $88.00
6/17/24 – Sell to Close 1 AVGO 7/26/24 $1680.00 C @ $165.00
Profit +$7700
This is the beginning of my stock split strategy with Broadcom, and it was a great beginning! I locked in $7700 and I will be back in another position soon. Plus I’m not done with Nvidia yet. I’m in a long term position with 3 contracts that expire on January 17th, 2025, 6 months from today. I doubt if I hold this position anywhere that long. I hope to be out within 3 months.
I would like to wish my son a very happy birthday. My son Stephen is the contributing writer who wrote the section “Options 101.”
Successful trading,
Steve
The Options Coach
How would you play AVGO now?
Hi Harold, just a reminder, Main Street beats Wall Street is to teach how options work and show my strategies with my trades. It is not to give trading advice. However, you did ask how I would play AVGO. I plan on being in and out of this stock with the buying of options, and selling them, until after the split. I will buy 1 or 2 Calls at a time, At-the-Money, with the Expiration Date of 7/26/24. As I make profit I will sell and buy another with the higher Strike Price. Hopefully hitting the highs and lows for buying in and selling the positions. I’ll determine this by watching the candlestick charts. I like the 1 minute chart. After the split, on Monday, July 15th, or a day or 2 later, I will sell all positions I bought before the split and buy a few long term positions. At-the-Money with the Expiration Date of January 2025. I hope this is helpful. You can send me an email anytime.
Successful trading,
Steve
The Options Coach