from the desk of Dr. Terry F Allen

Skip navigation

Member Login  |  Contact Us  |  Sign Up

support@terrystips.com

Consider Integrated Device Technology (IDTI) Following the Correction

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Consider Integrated Device Technology (IDTI) Following the Correction

Several analysts are expecting further upside for Integrated Device Technology, here are two of them – What the market is missing about Integrated Device Technology and Two worthy stocks for investors: Hovnanian Enterprises, Integrated Device Technology.

IDTI Chart June 2018

IDTI Chart June 2018

IDTI has been correcting lower over the past two weeks and is now seen trading at some important technical support.  Specifically, the stock is seen bouncing from a horizontal level residing at $31.30.  This level was notably important through several gaps that took place in late 2017 and earlier this year.  As well, the stock price is near the 200-day moving average, an indicator it has not traded below on a sustained basis in about two years.

If you agree there’s further upside ahead for IDTI, consider this trade which is a bet that the stock will continue to advance over the next three weeks, at least a little bit.

Buy To Open IDTI 20JUL18 29 Puts (IDTI180720P29)
Sell To Open IDTI 20JUL18 32 Puts (IDTI180720P32) for a credit of $0.69 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when IDTI was trading near $32.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $66.50 and your broker would charge a $300 maintenance fee, making your investment $233.50 ($300 – $66.50).  If IDTI closes at any price above $32 on July 20, both options would expire worthless, and your return on the spread would be 28% (568% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates June 28, 2018

IBD Underlying Updates June 28, 2018

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins

Member Login  |   Programs and Pricing  |  Testimonials  |  About Us  |  Terms and Conditions  |  Accessibility Statement  |  Privacy Policy  |  Site Map

Options are not suitable for all investors as the special risks inherent to options trading my expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options before investing in options

© Copyright 2001-2022 Terry's Tips, Inc. dba Terry's Tips
235 Primrose Lane, Ferrisburgh, VT 05456