Options Traders Place Big Bets On AMD Ahead Of Xilinx Acquisition

[Option Beast]( 04/10/2021   |   [View in browser]( --------------------------------------------------------------- [Options Traders Place Big Bets On AMD Ahead Of Xilinx Acquisition]( AMD and Xilinx met Wednesday to discuss the details of AMD's proposed $35 billion acquisition of Xilinx, which is planned to close by the end of the year. The big purchase, which has been in the works since October, is designed to help build out AMD's data center capabilities in the years ahead. Options traders are betting that this meeting could get the companies one step closer to their merger. Bullish options activity in the chip space is nothing new in recent weeks. The SMH semiconductor ETF has gained 10% in just the last month as supply shortages drive prices higher. In Monday's session, though, plenty of activity was stock-specific, and AMD was a big winner. [More...]( SPONSORED CONTENT [The End Of Capitalism As We Know It?]( A Maryland multimillionaire explains how a new money making era is erupting in America, making many rich -- [while leaving so many behind...]( [REFLECTIONS... The Bull And The Barriers by David Sager](#) Stocks Ended The Week on a Strong Note...The S & P 500 closed out a turbulent week with a rally that nudged it to a new high Friday. Stocks whipsawed nearly all week, slowly edging higher, before spurting to the closing bell. The S & P 500 rose 65 points or 1.7% to 3974. The Dow Jones Industrial Average added 453 points or 1.4% to 33,072, also a new high. The tech heavy Nasdaq Composite gained 161 points or 1.2% to 13138. As per usual this past week investors have mulled signals that the U.S. economy is on the brink of rapid growth, against underlying concerns of rising bond yields. These concerns apparently have eased a bit at week's end, as renewed optimism for valued stocks stroked the Dow and S & P 500 to new records. Investors have backed away from 'tech darlings' as well as special-purpose acquisition companies known as SPEC's, (as discussed last week). Interestingly trading in bullish call options tied to stocks has also cooled off substantially as volume hit the lowest level of the year this week. "I think some of the froth is coming out of the market, which is probably a good thing," said Steve Sosnick, chief strategist at Interactive Brokers. Mr. Sosnick said that options activity may have played a role in the late-day rally on Friday. Higher yields have posed a problem to shares of technology companies, calling into question their current valuations when much of their profits won't materialize for some time. And finally news of a huge container ship ran aground in a narrow section of the Suez Canal. Traders are continuing to monitor the blockage, as many of the ships are transporting oil. Prices of crude are already showing upside prices, reflecting the tragedy. President Biden is setting the stage for another huge spending package, this time focusing on infrastructure... The waters are getting muddy, and are magnified by trends supporting the thesis that the Federal Reserve's recent 'about-face' on inflation, from standing solid against it to trying to stoke it. This new Biden package will be unveiled Wednesday, March 31st in Pittsburgh. The package of infrastructure and tax changes will 'change the paradigm," Biden said. "We start to reward work and not just wealth." That does hint that corporate and capital gains tax hikes, which were a big part of Biden's campaign platform are beginning to become reality. Interestingly, Transportation Secretary Pete Buttigeg said the White House is considering taxing people based on vehicle miles traveled, an alternative to a gas tax. Sounds Like a lot of political rhetoric and a lot of added bureaucracy. The Global Recovery Points To Demand For Oil Steel And Energy... Commodities have performed well this year, with energy, oil, and steel stranding out. High demand for these commodities have brought steady gains for them. The overall expectation for a worldwide economic recovery supports a much brighter outlook for demand. Looking at commodity prices in the months ahead, the market is not concerned about "the next strain of potentially mutated Covid in Europe," says Adam Koos, president of Liberties Wealth Management Group. "Price trends are supporting the thesis that the overall economy is going to continue to improve. The S&P GSCI index which tracks 24 exchange traded commodity futures contracts, has climbed 16% year to date as of March 24. The subindex S&P GSCI Energy Index trades about 24% higher. Fawad Razaqzada, market analyst at online brokerage ThinkMarket attributes, "outsize recovery" to climb from the historic drop to negative prices for West Texas Intermediate crude, that occurred back in April 2020, while supply restrictions by the OPEC+ alliance, will improve demand outlook. Other commodities with outsize gains this year include lean hogs, up 45%, and steel up 40%, on futures markets. All sectors of commodities markets are up and all are experiencing stronger demands. The global recovery is leaning heavily on commodities and their specific contribution areas no matter how small, are like 'spokes in the wheel.' A Short Bit on Bitcoin... Bitcoin has been hovering in the mid-fifties for several days, presently at $55,996.20 (3-27-21). Friday's record $6 billion expiry in the bitcoin options market turned to be a nonevent as prices for the largest cryptocurrency climbed steadily, with no softening, but a development of a solid base. As we near the end of March, one analyst said bitcoin should get "a nice tailwind" as hedge funds "rebalance" for quarterly reports. "Both Bitcoin and the S&P 500 have reached new all-time highs every month since December," said Sean Rooney, head of research at Valkyrie Funds. RUMBLINGS ON THE STREET Treasury Secretary Janet Yellon, testifying before Congress Barron's "I am confident that people will reach the other side of this pandemic with the foundations of their lives intact...In fact, I think we may see a return to full employment next year." Richard Saperstein, chief investment officer of Treasury Partners, an investment firm. Barron's Mr. Saperstein is sensitive to high multiples, but he isn't giving up on tech. The pandemic has "pulled forward the adoption of technology across all sectors of the economy and all of our lives," he says. But rather than buying "startups with infinite multiples," and "Covid beneficiaries with nosebleed multiples," he's focused on companies generating hefty cash flows and deploying the cash to build their businesses. Tony Sacconaghi, Bernstein tech analyst, Barron's "Look, momentum is a really powerful thing, and during growth markets you can make hay. That's the environment we've had....(But) what went up is indeed starting to come down." Bryon Wien, senior investment strategist at the Blackstone Group. Barron's "To some extent, higher taxes are priced into the market," says Mr. Wien. "Since Biden was elected, people have gotten prepared for that." "It is also possible that investors expect Senate Republicans and moderate Democrats to block any more to lift corporate taxes. Wien sees some upside for the S&P 500 this year along with higher rates, including a 2%-plus yield on the 10 year Treasury, now yielding 1.68%. "At these levels of interest rates, the S&P 500 can support a (price/earnings) multiple of 20 or more." Suzanne Hutchins, head of real return investments at Newton Investment Management, WSJ "Generally things look pretty good, but it is a very unstable environment," said Ms. Hutchins. She said she expects a booming U.S. economy to fuel further gains for stocks. [Bullish Option Trade In MU Stock Has 47% Return Potential]( While the Nasdaq composite was in a corrective phase over the last couple of months, it didn't hit all the technology stocks the same. One group that held up particularly well was the data storage group, including number-one ranked MU stock. Micron Technology (MU) was recently listed as one of 22 of the fastest growing stocks expecting a greater than 50% increase in earnings per share this year. MU stock is holding above rising 21-, 50- and 200-day moving averages. Look at it compared to the Nasdaq composite. While the Nasdaq composite struggled underneath its 50-day moving average line, Micron stock quickly got support at that level. Micron is also showing excellent stock ratings with a Composite Rating of 98, an EPS Rating of 96 and an RS Rating of 82. Let's take a look at a bullish option trade on MU stock known as a bull put spread. [Article continues...]( [10 Easy Ways to Save Money on Recurring Expenses]( Amidst the Covid-19 pandemic, many people put everything from groceries and paper goods to alcoholic beverages on some form of automatic delivery. A recent study from Chase Bank showed that 55% of Americans have no idea how much they're spending per month on recurring payments. Now that vaccines are helping to reduce the spread of Covid-19, many people might be looking to reduce monthly expenses to free up spending for things like travel, eating out, and going to the movies again. As you get your finances in order for a post-pandemic world, follow these tips to decide what subscriptions to cut and how to avoid spending too much on monthly services in the future. [Click to continue reading this article...]( [These 3 Things Will Make Retirement Much Easier]( Retirement is an exciting yet daunting time. After decades of living off of a paycheck and having built-in structure to your weekday, it can be a major adjustment. Since we all want to be prepared to make this transition as enjoyable as possible, here are 3 things that will make retirement a whole lot easier. [More here...]( SPONSORED CONTENT [This Money Trade Appears Between 9:30-10:45am Almost Every Day...Â]( If all you did was focus on this one simple trade you could make between $300-$1,100 per contract each day you trade. Don't make trading harder than it has to be. Keep it simple and walk away with daily profits. Get your free guide that shows you how to spot this, and when to enter & exit. [CLICK HERE for instant access.]( --------------------------------------------------------------- [Option Beast]( Send this to a Friend. [Click here.]( | Not a Subscriber Yet? [Click here.]( All content © 2021 Option Beast Neptune Ave, 300 Main Street #711, Madison, NJ 07940 USA Welcome to Option Beast, an e-mail service that replaces many of our previous alerts. We hope you enjoy it. If you do not wish to receive this email service, please [click here to unsubscribe](. [Privacy Policy]( --------------------------------------------------------------- © Copyright 2021 Option Beast, All rights reserved. All content made available to you through our services are subject to and protected by copyright. Legal disclaimer: Option Beast is strictly a research publishing firm and much of the information we publish in email and our various websites are obtained from sources we believe to be reliable. You should know that accuracy can never be guaranteed. We do not design our content to meet your personal situation & you need to know we are absolutely not financial advisors and we never, under any circumstance give our users personalized advice. Every single opinion we express herein are those of the publisher and are subject to change without notice. Published content may become outdated and there is no obligation to update any such information. Sponsored emails like this in Option Beast or our other publications contain paid advertisements and don't necessarily endorse or recommend it to you or any investor. Neither the company nor our affiliates bear responsibility or control over the content of the advertisement and the product or service offered. Proceed at your own risk... If you wish to contact us, please do not reply to this message but instead e-mail us at support@optionbeast.com. Replies to this message may not be read or responded to. We are unable to respond to emails and phone calls requesting personal financial advice.