QCOM Bearish Calendar Put Spread Looks Cheap at 92 Cents

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This QCOM Calendar Put Spread Could Pay 4.5 to 1

Bearish play with a target stock price of $185

Strategy has +447% upside potential and 20% undervalued

Strategy: Long QCOM Calendar Put Spread
Sell 14-Jun-24 185 Put2.07
Buy 28-Jun-24 185 Put2.99

Qualcomm is weaker by -0.6% today to $193.48. Today's price action is showing weakness in both the stock and the overall market. Setting up this calendar spread with strikes at $185 gives you a bearish bias to tap into QCOM stock's weakness.

Option Profit Calculator Results for QCOM Calendar Spread at 14-Jun-24 Expiration

In this scenario, the optimal stock price for the option strategy would be $185.00 on the date of the first expiration, June 14, 2024. This is equal to the strike price of the options in the spread. Since there is notable downward pressure in both the market and QCOM, and the strikes are below the current stock price of $193.34, the spread is taking advantage of the market's bearish bias. If the stock price is $185.00 at expiration, we can benefit from the 14-Jun-24 put, which we sold, expiring worthless, and the option that we are long, the 28-Jun-24 put, will still have time premium built in.

Since we do now know what the exact implied volatility will be on June 14, we can use our historical data to make an educated estimate to help us calculate the value of the 28-Jun-24 option. Applying the median historical implied volatility of 34.1 from similar options, the theoretical value of the put is 5.03 at the date of the 14-Jun-24 expiration. Using the above assumptions gives us a potential upside of +447% for this calendar spread.

QCOM Calendar Spread Value vs. Market Price

According to Market Chameleon estimated value, QCOM Calendar Spread is trading at a 20% discount to historical benchmark.

If we use historical data to measure how similar spreads in QCOM were priced in the market, the 4-year average price was 1.16, with a high mark of 2.33 and a low of 0.58.

Currently, the calendar put spread is bid at 0.73 and offered at 0.92. The midpoint of the spread is 0.83.

If we use 1.16 as our historical fair value benchmark, the current market ask price is at a 20% discount, while the current market midpoint represents a 29% discount.

Current PriceHistorical Values of Similar Spreads
Market Chameleon captures daily records of market data to calculate historical benchmarks and generate estimated values.


The QCOM calendar put spread we've identified here can be a good way to play a bearish outlook because the option strategy has a +447% upside potential, is 20% underpriced relative to historical measures, and will benefit from the stock price moving lower to $185.

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