In my scan for high IV rank stocks, QCOM unsurprisingly popped up with 68.9%. Its IV has reached the level it was prior to earnings earlier this month because it’s dropped over 24% in the past 8 days. That’s what an antitrust suit will get you. But you have to wonder if this sell-off is overdone just as its rally back in April was overdone. After all, QCOM still makes some nice technology, and despite the uncertainty the courts are tossing on its business model, the company may figure out how to resume its profits when the rulings finally come out in the not-near future. That’s why a contrarian bull might see an opportunity with the high IV rank. If you are bullish on QCOM, the short put vertical that’s long the 62 put and short the 63 put in the July weekly expiration with 37 DTE is a bullish strategy that collects a credit 1/3 the width of the strikes, has a 69% prob of making 50% of its max profit before expiry, and that generates $.18 of positive daily theta.
Opened 19/05/29 for $.36 credit
Closed 19/06/04 for $.25 debit