Today’s model portfolio spans 3 quantitatively-scored trades across our watchlist.
Each position is sized to fit within a $6,667 budget slice. The post below is a deep dive on one of those trades — use the table to explore the others.
Today’s $20,000 Model Portfolio · 3 Trades
| Ticker & Strategy | POP | Max Profit | Contracts | Allocated |
|---|---|---|---|---|
| DRAMBull Call Spread↗ | 95% | $14,427 | 14 lots | $6,573 |
| AMATTHIS POSTBull Call Spread | 95% | $7,345 | 2 lots | $4,655 |
| AMDBull Call Spread↗ | 93% | $7,710 | 3 lots | $5,790 |
| Portfolio Total | $29,482 | 3 trades | $17,018 (+173.2% if max profit) |
Equal-weight sizing: $20,000 split across 3 trades at $6,667 per position. Contracts = floor(position budget ÷ max risk per contract) so each trade stays within its risk envelope. POP = probability of profit at expiration (model-derived). Max Profit = maximum gain if held to expiration and the spread expires at full profit. Click any row to read the full trade analysis.
Company & Market Context
Applied Materials, Inc. (AMAT) is a global leader in materials engineering solutions, supplying the semiconductor and display industries with the equipment and software needed to manufacture advanced chips and flat-panel displays. As a bellwether of the Technology sector, AMAT's options market tends to reflect broader sentiment around semiconductor capital expenditure cycles. With the stock trading above $600 and implied volatility running notably elevated relative to historical norms, the current environment creates a well-defined risk/reward window for structured spread strategies. The options market is pricing in meaningful near-term uncertainty — a condition that systematic options screening is specifically designed to exploit.
Why This Trade Setup
This Bull Call Spread expresses a moderately bullish-to-neutral directional view on AMAT over the next 16 days, with a defined maximum loss and a high probability of retaining value at expiration. The long call anchors the position below the current price, while the short call caps the upside — a structure that benefits when the stock remains above the long strike through expiration. What makes this setup compelling from a quantitative standpoint is the probability of profit derived from Black-Scholes pricing models, which sits at an exceptionally high level. The composite quantitative score of 0.83 — a score derived from options pricing models, implied volatility regime analysis, and probability-weighted momentum signals — reflects strong structural alignment. Elevated ATM implied volatility at 77.5% means option premiums are rich, favouring debit spreads where the long leg captures intrinsic value efficiently relative to the cost of the short leg. Neutral momentum reduces the risk of an adverse directional move disrupting the thesis before expiration.
Key Risks
- Sharp downside move: If AMAT sells off significantly before the July 10 expiration, the spread can lose its full debit paid. The maximum loss per position is capped and known in advance, which is a core advantage of this structure.
- Volatility crush: A rapid decline in implied volatility could compress the value of the long call faster than anticipated, even if the stock moves favourably.
- Short time horizon: At 16 DTE, there is limited time for the trade to recover from an adverse move. Position sizing — illustrated here as 2 contracts within a diversified three-trade portfolio — is critical to managing overall exposure.
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Important Disclaimer: This content is generated automatically for informational and educational purposes only. It does not constitute financial advice, a solicitation, or a recommendation to buy or sell any security. Options trading involves significant risk and may not be suitable for all investors. You may lose more than your initial investment. Past performance does not guarantee future results. Always conduct your own due diligence and consult a qualified financial advisor before making any investment decisions. QuantMint is not a registered investment adviser.