We had a busy morning as we announced our 2022 Trade of the Year (officially) as IBM.
In setting up the trade for the Money Talk show tonight (7pm, BNN), I came up with a more conservative strategy that still has kick-ass returns. While reviewing our Money Talk Portfolio, we had several more trade ideas that are all Top Trade worthy.
I know it's annoying that sometimes we don't put out Top Trade Alerts for weeks but, when the market gives us a sale, THEN we have plenty to talk about:
VIAC – I am as dumbfounded as to how cheap Viacom is as I was about HPQ last quarter. You would think they are going bankrupt but no, they are making $2.5Bn a year yet, at $31, you can buy the whole company for $20Bn – and I predict someone will. When that happens, we collect sooner so we're going to close the current spread for a net $5,300 loss and add back the following:
- Sell 10 VIAC 2024 $30 puts for $6 ($6,000)
- Buy 40 VIAC 2024 $25 calls for $10 ($40,000)
- Sell 40 VIAC 2024 $40 calls for $5 ($20,000)
That's net $14,000 on the $60,000 spread that's $24,000 in the money to start and, if VIAC gets bought for $40+, we will get a quick cash out on our spread with the full $46,000 (328%) upside potential realized. That would make up for the $5,300 loss quite nicely!
Intel (INTC) was our Trade of the Year for 2021 and it did so well we cashed it out in April but now it's come back down and we'd like to add it back to our Money Talk Portfolio. They did not make the cut because 2022 is an investment year for them but, longer-term, we're very exited to own the stock under $50.
