TCOM Hedged Options Trade

16 พ.ย. 2022

At the midpoint of travel, China, and the internet is Shanghai-based TCOM -- owner and operator of Trip. com, Skyscanner, Qunar, TrainPal, MakeMyTrip and other websites for hotel reservations, transportation tickets, corporate travel, and other travel services internationally. Other areas of business are insurance products, tours and packages, travel data collection and analysis for companies, travel reporting, online advertising and financing services. As China re-opens after COVID, Beijing attempts warmer relations with Washington, and revenge travel buoys both short- and long- term outlooks for the industry, the weekly chart for TCOM shows mainly bullish with a bit of indecision. A quick peek at popular sites like Yahoo Finance confirm a positive outlook, with the majority of analysts saying it's a buy, with a few "strong buys" and a few "holds."

This hedged options strategy can make up to 12% (21% annualized) while allowing TCOM room to fall 35% to below $18.81 through next June before losing any money.

Buy 1 $28 Call
Sell 1 $32 Call
Sell 2 $19 Puts
All expiring 6/16/23

Capital Required: $3763