Execute all four of the options: buy a call, sell a call, buy a put, and sell
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Execute all four of the options: buy a call, sell a call, buy a put, and sell a put. Use an approximate 3-month time frame and use options on your existing holdings. Also, and this is important, use a Strike Price, near the current price of the stock. So, if the stock is currently selling for $98, then use a strike of $95 or $100.
Annotate the strike price, the option price, the maturity, and the price of the underlying security plus why you did what you did and what you learned.
| Company | Positions | Purchase Notes | |||||||||||||||||||||||||||||||
| Microsoft Inc. | Long | Microsoft is one of the growth stocks that has stayed strong underneath economic uncertainty. Outside long-term substance lies the balance sheet attraction. Microsoft with a cash balance of $136.5 billion in cash and short-term investments and a free cash flow of $45.2 billion in keeping the company out of trouble. Therefore, when times are uncertain and stock prices are changing, I can rest easy with Microsoft. Microsoft is in conversation with ByteDance to buying TikTok operating in the US. | |||||||||||||||||||||||||||||||
| Nike Inc. | Long | Nike, with its strong recent results beating Wall Street estimations, compelled me to purchase this stock. The company is focused on innovations with solid internal growth and great performance of the NIKE direct business. Nike shares are down about 20% to its 52-week high, facing issues related to efforts and to stem the pandemic. I feel this short-term downturn could become an opportunity on a long-term basis as Nike with its strong brand name and increase in digital sales, is most likely to go up in the coming weeks. | |||||||||||||||||||||||||||||||
| Paypal Holdings Inc. | Long | I invested in Paypal as the company is a market leader in a space that is only continuing to grow. Its earnings and market share are rising year over year with the introduction of new apps such as Venmo. Paypal is also working on using touch-free QR code technology for digital payments, already signed by CVS Health as the first chain to use QR codes at checkout. The company with 346 million users has a long room for growth and a strong cash position. | |||||||||||||||||||||||||||||||
| Jhonson & Jhonson | Long | I choose to invest in Jhonson & Jhonson as it is a leading pharmaceutical company by market cap. The company reported an increase in top and bottom-line earnings and relatively strong IBD ratings. The company is charged toward the coronavirus vaccine, and any news regarding its vaccine could raise shares of JNJ. | |||||||||||||||||||||||||||||||
| Long | Facebook is not only highly profitable but growing rapidly. Facebook is very much successful on mobile with its products like the Facebook Audience Network. Its forward price-to-earnings ratio of 38 and increased profitability presents its premium valuation and growth. | ||||||||||||||||||||||||||||||||
| Adobe Inc. | Long | Adobe stands at the top in the desktop software industry, with strong EPS (company health) and SMR (sales growth) ratings. Adobe's 39% return on equity, a debt-to-equity ratio of 9%, and a 39% pretax margin can motivate any long-term investor. Adobe, with a long track record of success and ongoing opportunities will benefit me in the long-run. | |||||||||||||||||||||||||||||||
| Apple Inc. | Long | Apple Incorporation is one of the biggest cash cows with a market capacity of over $2 trillion. The company is growing in China and will be around for a long time, and this one fact alone gives Apple's shares value. | |||||||||||||||||||||||||||||||
| Tesla Inc. | Long | Tesla stock is down as its results were not profitable on a GAAP basis in the prior year. However, Tesla is a good investment as its relatively stock price are not likely to stay for long. It is continuing to build capacity by manufacturing many more plants in different regions and there is no doubt the company will plough ahead with its innovation and top-quality products. | |||||||||||||||||||||||||||||||
| PepsiCo | Long | I selected to invest in PepsiCo for its strong growth potentials and always looking for new ways to stay in trend. PepsiCo with its new launch of crunch flavor and acquisition of juice manufacturing companies is most likely to increase its revenue. While its growth rate is not the fastest as its rival companies, it's experiencing its fastest growth in years. The company's future outlook is estimated to be steady and return to growth, with a rise in earnings per share by 7%. | |||||||||||||||||||||||||||||||
| Walmart | Long | I preferred to invest in Walmart for the strong and impressive bounce back from major lows in March 2020. Walmart is aggressively investing in online business to capture the next generation of shoppers and gaining a market share from retailers and Amazon. Its stock is 20% high with the launch of its own version of Amazon Prime. | |||||||||||||||||||||||||||||||
| Starbucks | Long | I decided to invest in this stock as its strong operating income and balance sheet position puts the management in a position to bringing the company back to its long-term growth targets. Starbucks with its stellar brand value and is doing great with its reward program for bringing business revenue. | |||||||||||||||||||||||||||||||
| CVS Health | Long | I purchased CVS stock since it is a market leader in its core market. It is posied to taking advantage of secular growth in the healthcare industry. There are rumors about its mergers with AET, which I believe is a good fit signifying a potential power in the health care market and a large rise in CVS stock on the horizon. | |||||||||||||||||||||||||||||||
| Visa Inc. | Long | The stock though is struggling with a 37% drop in stock price, 23% in earnings, and 17% in revenue. I decided to buy Visa stock because the company share price perfromance and net earnings has a strong track record. Payment processing has become a profitable business in the current scenario, being said that I expect Visa stock to rise in the coming weeks. | |||||||||||||||||||||||||||||||
| Long | I chose to purchase Twitter stock as it is a great product with additional space for growth and has great brand recognition. Twitter reports they have over 320 million monthly active users. That's a lot of reaches. That kind of customer base still has value. | ||||||||||||||||||||||||||||||||
| NonVisual Desktop Access | Long | NVDA reporting record revenue and income growth appealed to me to buy this stock. Both gaming and Artificial Intelligence should increase the stock value in the coming years. NVIDIA’s business surroundings and earnings show that it is now positioned for growth. There’s a demand for NVIDIA products, with an increase in its earnings. The stock is now adopting technical strength, and my optimism is gradually building. | |||||||||||||||||||||||||||||||
| McDonald Corporation | Long | McDonald's is a company with a brand name, which is geared for drive-thru and will be able to function with social distancing. The company has demand in both good and bad times. The P/E ratio is fair, it is making profits year after year and is paying good dividends with a rising trend. | |||||||||||||||||||||||||||||||
| Long | I personally think it is a great investment with a constant growth rate and big potential to rise. I decided to buy this stock as I think the returns will be greater than what I invest today on a long-term. Its stock price has moved from $792 in 2017 to $1,598 as on 27th October, 2020. I bought a few shares will just hold them forever to see where they go and might end up rich if the stock splits a few times. | ||||||||||||||||||||||||||||||||
| Under Armour | Long | I think UAA is a great investment with a steady growth rate and a big potential to rise. I decided to buy this stock as I think the returns will be greater than what I invest today in the long-term. Its stock price has moved from $792 in 2017 to $1,598 as of 28th October 2020. I bought a few shares that will just hold them forever to see where they go and might end up rich if the stock splits a few times. | |||||||||||||||||||||||||||||||
| McKesson Corporation | Long | My interest was shifted to McKessen because of the benefits it has gained from the current situation. McKesson that distributes medical and pharmaceutical products has gained enough business growth due to the Covid-19. The company's stock has grown by 38% since last year. Covid-19 is helping in sustaining its volume, total company revenue is expected to jump sharply in 2022 mostly benefiting from the price increase due to the supply pressure of medical products. | |||||||||||||||||||||||||||||||
| Verizon Communications | Long | I purchase Verizon Communication stock because it holds the lower debt, is avoiding large acquisitions, and has been building 5G wireless aggressively. The 5G buildout could raise the company's earnings and revenue. | |||||||||||||||||||||||||||||||
Expert Answer:
Company Positions Purchase Notes Microsoft Inc Long Microsoft is one of the growth stocks that has stayed strong underneath economic uncertainty Outside longterm substance lies the balance sheet attra... View the full answer
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