What’s the hottest sector of the entire year to trade?
If you answered “Chip stocks, duh,” well, you nailed it! And with Marvell Technology (MRVL) reporting earnings after the close Thursday, the order flow has been a veritable chip stock party all day long!
There is of course the usual avalanche of Nvidia (NVDA) order flow, which isn’t anything new. Other usual suspects also abound in names like Advanced Micro Devices (AMD), Supermicro Computer (SMCI), Taiwan Semiconductors (TSM) and Arm Holdings (ARM).
We’re also seeing names we don’t get too often like Microchip Technology (MCHP), Micron (MU), Texas Instruments (TXN), NXP Semiconductors (NXPI), all ahead of Marvell’s earnings report after the close.
So let’s talk Marvell…
The stock is trading just under $84 as of 1 p.m. ET, and market makers are implying a $10.10 move higher or lower.
We’ve seen five different orders hit today in MRVL, three bullish and two bearish.
Generally during earnings season, we see a lot of very short-dated flow, but everything today so far has been longer-dated, which is of course a little safer should things go wrong.
A weekly expiration will go to $0 if you’re wrong, but pushing things out gives you a little more time.
Also worth mentioning: Puts are oftentimes hedges against a long stock position should the stock tank on earnings. That way, the trader can get something back should they lose all their gains from the underlying stock.
However, puts that are in the money are a lot sexier than a put that’s way out of the money. And today’s MRVL puts are DEEP in the money, which means the buyer could have more conviction.
With the stock trading around $84, the $82.50 and $90 calls listed below fall easily into that $10.10 implied move by market makers. Just be sure to respect the risk and never trade more than you’re comfortable losing!
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
Lance Ippolito Trading Team
Lance doesn’t want the CCP spying on him, so you’ll never find him on TikTok. Same goes for other social media sites, which are filled with impersonators, scammers and crypto bros.
You can only find him on his personal YouTube Channel — smash that Subscribe button! https://www.youtube.com/@LanceIppolito
And in his private Telegram channel: https://t.me/+-gVwEIwGJhplMTgx
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. HOT STREAK! Perfect Tesla Trader Has Nailed Six Straight
Tesla stock has been pretty disappointing in the new year.
It’s down about 30%…
But on the other hand, the Perfect Tesla Trade has been clutch.
In fact, it’s gone undefeated in 2024…
That’s six winning trades in a row with the longest hold time being five days…
You can see what I mean here…
Obviously, I can’t promise when a new opportunity will present itself or that it’ll be a winner — there are no guarantees in trading.
But our track record speaks for itself, and I know the next big Tesla trade is right around the corner…
Past performance is not indicative of any future results. Trade at your own risk. From 7/20/23 – 3/1/24 on live trades the win rate is 75%, the average return is 20.07% including winners and losers on the options over a 3-day average hold time.
