Options Insights: Criteria For Selecting Long-Term Target & Recommendations

Thanks to the Tiger community for providing useful investing information and helping me learn more about options.

Therefore, I plan to write a series of articles on [Options Insights] to summarize my 10+ years of experience in trading US stock options.

I've traded 863 stocks and only 8 of them lost money. I hope my [Options Insights] series can help more users.

We go back to our topic: the criteria of choosing long-term target. We can sell put or buy underlying shares in the long term.

2 Key Criteria

1. Market cap: $10 billion or more

Small-cap companies are highly volatile and are subject to more uncontrollable factors.

2. Stable fundamentals

In the next 5 years, there will be:

• no major policy risks
• no new technology disruptive possibilities
• no strong competitors to change the market share pattern

The Least- and Most-Recommened Tickers

Under this criteria, I sort out the tickers I won't trade.

1. $ Alibaba (BABA)$ : fierce competition

Currently, 3 big giants- $Alibaba(BABA)$ vs $JD.com(JD)$ vs $Pinduoduo Inc.(PDD)$- is already trapped in very intense competition.

The rise of Douyin, $MEITUAN-W(03690)$ and $KUAISHOU-W(01024)$ has exposed $Alibaba(09988)$ to even fiercer competition. Especially Douyin has a lot of online traffic. In the long run, it is doubtful that whether $Alibaba(BABA)$ can keep its existing market share or not.

2. $Meta Platforms (META)$

There is temporarily no large-scale commercial application on Metaverse. It is also faced with challenges from tiktok.

3. $Alphabet(GOOG)$

In the web era, google has a powerful search engine, and no rival.

But in the mobile era, the proportion of website search declined, all kinds of vertical app divided too much time and information connection.

4. Not sure about semiconductor sector. $NVIDIA Corp(NVDA)$ $AMD(AMD)$

Because I do not know much about semiconductors, so I do not intend to invest in the industry that I do not understand.

The future demand for high-end chips for cell phones may decline.

Under this criteria, I sort out 2 tickers that suit for the criteria.

1. $Apple(AAPL)$

Apple user retention rate is huge: Apple has a very well-developed ecology, so the original users are difficult to switch to Android.

Apple's app store has 30% cut from apps. I don't think the Android phone has a chance of overturning Apple's market share in 3-5 years.

2. $Nasdaq 100 ETF(QQQ)$

The broad market index is still the most reliable.

Looking at the historical data, the past 100 years, except for the 1929 stock market crash fell 90%, other market crashes range from 50% or so.

The retracement level is way lower than the individual stocks.

Welcome to leave your comments and recommend more tickers to me!