LUMN Protective Options StrategyLouisiana-based Lumen Technologies Inc (Quantum Fiber and CenturyLink) is one of the largest communications companies internationally. Its business segment offers cloud, IT, co-location, data and content delivery, IP, VPN, security, and other computer application services. Lumen also provides fiber optic infrastructure, data hosting and Ethernet as well as broadband, voice and private line or direct circuit services. At the end of 2021, the company had ~4.5 million broadband subscribers.
With major stocks gaining momentum during earnings week and some optimism over next week's Fed announcement, maybe it's time to look at the technology sector again and an telecommunications/internet service provider may prove more stable than semiconductors. Technically minded investors might also see a double bottom and consolidation into a falling wedge, though that last candle might cause some hesitation.
Here's a hedged options strategy that could make a fixed 8% yield (21% annualized) unless LUMN falls more than 23% to below $4.02. Further downside protection: LUMN can fall up to 27% (to below $3.81) as of 6/16/23 before you lose any of your investment.
Buy 1 $3 put
Sell 2 $4 puts
Exp 6/16/23
Capital Requirement: $464
