Semiconductor stocks may have lagged the technology rally this year, but one trader is betting on a breakout for one name.
"They're trying to diversify away from just mobile phones and into the Internet of Things, specifically 5G. They're trying to connect all of our devices to the internet and to each other called the Internet of Things. It's creating a traffic jam in the current 4g network.
Skyworks traded at $138 on Friday. It has fallen nearly 5% this week as part of the broader market sell-off.To take advantage of a move back to highs set on Wednesday, Gordon is implementing a call spread – buying the 140 strike call with Nov. 20 expiration and selling the 160 strike call. "In real dollar terms, that's a $2,000 spread. You'll have to pay about $863 … so the max profit would be $2,000. Subtracted from the premium paid at $863 leaves the max potential profit at about $1,137," he said.
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