Semiconductor Profits

Everything we own today is powered by semiconductors.

The industry is growing nicely and companies such as QCOM, NVDA and INTC are reaping profits.

A simple way to measure semiconductor stocks is buy VanEck Vectors Semiconductor Fund (SMH). After its recent pullback, it has held the 200-DMA and bounced higher. This is a great time to get into this trend and collect a big cash payout.

Trade details:

Sell the August 17, $105 puts on SMH for $2.25 using a limit order. An upfront payment of 2.1% for agreeing to buy shares at a 1% discount.

At expiration if SMH is above $105: put sellers will keep the $2.25 free and clear a 26.1% annualized return.

At expiration if SMH is below $10: put sellers will buy shares at a discount.

For protection use a stop loss at $95 which is about 10% below current prices. This will also be below the 200 day moving average (DMA).

Hop on this trend and get paid today.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.