IA Trade Alert (Patreon)

THE REASON FOR THE TRADE

STM UPDATE on my TRADE and Reasoning - not Just TA

STMicroelectronics (STM) has seen a notable uptick in stock performance recently, likely driven by CEO Jean-Marc Chery's optimistic remarks today, June 4, 2025, at a BNP Paribas event. CEO highlighted signs of an upcycle, with the book-to-bill ratio exceeding parity, indicating strong future revenue potential, especially in automotive and China. The stock surged 11% today, and I like to sell POPS!

However, there are mixed signals: the company announced 5,000 job cuts over three years, which concerns me a tad, and BofA Securities cut the price target to $27 from $32, citing FY27 tariff risks. Despite this, near-term EPS estimates were raised due to better Q2 and Q3 trends, suggesting short-term strength.

Note GF Fair Value has also tanked down from $47 to $32

THE TRADE

I opened the 3rd leg of the stool on $STM - I have an existing Synthethic Long on this one and was watching it pop the last few days... I think now it is running out of steam.

I now am playing with the tables money - what I like.

I sold the $29 calls for Jan 2026 for $3.60 against my in-the-money Synthetic long - I will roll up if STM goes above $32.60. I will buy them back if STM mean reverts. Stock was at $28.50 when I sold the calls.