To focus on its primary business, Texas Instruments is shifting its focus form the wireless components of its business toward analog. The company is also looking towards a new segment called embedded processing. While the company has high involvement in manufacturing chipsets for popular e-book readers, competitors like Qualcomm, Inc. (NASDAQ: QCOM) are gaining substantial market share for newer smartphones and tablets. Despite competition, and TXN’s decision to step away from the growing wireless market, many analysts have strong recommendations for the stock with price targets in the range of $38 and $40.
The Trade: Selling the TXN May 33-32 Bull Put Spread and 36-37 Bear Call
Spread for $.39 total
Risk: $61 per 1 lot
Reward: $39 per 1 lot
Breakeven: $32.61 and $36.39
Greeks of this Trade:
Delta: Flat
Gamma: Short
Theta: Long
Vega: Short