{"id":12829073,"date":"2025-07-18T13:05:39","date_gmt":"2025-07-18T17:05:39","guid":{"rendered":"https:\/\/www.philstockworld.com\/?p=12829073"},"modified":"2025-07-18T13:06:48","modified_gmt":"2025-07-18T17:06:48","slug":"philstockworld-top-trade-alert-july-18-2025-gilead-sciences-gild","status":"publish","type":"post","link":"https:\/\/www.philstockworld.com\/2025\/07\/18\/philstockworld-top-trade-alert-july-18-2025-gilead-sciences-gild\/","title":{"rendered":"PhilStockWorld Top Trade Alert &#8211; July 18 2025 &#8211; Gilead Sciences (GILD)"},"content":{"rendered":"<p><strong><img loading=\"lazy\" decoding=\"async\" class=\"alignleft\" src=\"https:\/\/images.roi-nj.com\/wp-content\/uploads\/2020\/09\/Gilead-Immunomedics-crop.jpg\" alt=\"Gilead Sciences paying $21B in cash for Immunomedics and its cancer-fighter  Trodelvy | ROI-NJ\" width=\"340\" height=\"200\" \/>We discussed GILD in yesterday&#8217;s Live Member Chat Room after hours.\u00a0<\/strong>\u00a0<\/p>\n<p><strong>As you will see, it&#8217;s not just the trade, but the lesson of the trade that makes it worth choosing.\u00a0 If you are a beginner trader (but you&#8217;ll still need margin), I suggest dividing the amounts by 5 and following along (we will update along the way) as this trade idea will teach you a lot about long-term trade management and adjustments:<\/strong><\/p>\n<p>$109 is $136.6Bn and they are making $10Bn so 13-14x is a good price (I always like GILD). $17Bn in debt is less than two year\u2019s earnings \u2013 not too bad and shitty, 3% dividend is fine by me as they are not wasting money (but no room to fall back either).<\/p>\n<p><a href=\"https:\/\/publish.finviz.com\/071725\/GILDw170040097i.png\" target=\"_blank\" rel=\"nofollow noopener noreferrer ugc\"><img decoding=\"async\" src=\"https:\/\/publish.finviz.com\/071725\/GILDw170040097i.png\" alt=\"comment image\" \/><\/a><\/p>\n<p>My issue is that there\u2019s no top-line growth. $27Bn in 2021, when they were $70 with $6Bn in earnings and now $29Bn with $10Bn in earnings so they\u2019ve been squeezing efficiency and probably spending less on R&amp;D so I wouldn\u2019t give them more than 1.66x for the earnings gain and that\u2019s $112, which means the price is right.<\/p>\n<p>Then the problem is we KNOW things fall off-patent so there WILL be pressure to go back to an investing cycle and traders WILL be disappointed when it happens (2027ish) so I would certainly play a channel down to $90.<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>NOW we have a trading range for the LTP:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><span style=\"color: #0000ff;\"><strong>Sell 5 (happy to DD on a downturn) GILD Dec 2027 $90 puts at $9 ($4,500)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Buy 15 GILD Dec 2027 $90 calls at $29 ($43,500)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 10 GILD Jan (2026) $110 calls for $8 ($8,000)<\/strong><\/span><\/li>\n<li><span style=\"color: #0000ff;\"><strong>Sell 10 GILD Oct $110 calls for $5.50 ($5,500)<\/strong><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #0000ff;\"><strong>Puts are not worth selling (Oct $105 puts are $3.50), but of course on a nice dip sell some. As it stands, net $25,500 on the $45,000 spread but your time advantage means easily double that if things go well to the upside and, if not, then you have 2.5year to sell $5,500 per quarter ($45,000 ish) not even counting short-term puts and you WILL collect at least $8,000 more premium when the 2026 short calls expire (or position at worst) so lots and lots of ways to make money and, if GILD goes down, you sell short-term puts ($2,500+ per q) and more 2027 puts ($5,000) and you use that money ($5 per long) to roll down to the $80 calls and, if lower, roll and DD and make it a 5-year recovery play.<\/strong><\/span><\/p>\n<p>That seems to cover the next few moves down the board!<\/p>\n<p>And, as he often does in our Live Chat Room, Warren decided it this trade idea would make a good &#8220;<em>Master Class<\/em>&#8221; in options strategies for our Members (this is pretty advanced stuff but that&#8217;s why working with this trade will be valuable to your own learning experience):\u00a0\u00a0<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/publish.finviz.com\/071825\/GILDd130374919i.png\" alt=\"Finviz Chart\" \/><\/p>\n<h2><span class=\"ql-emojiblot\" data-name=\"robot_face\"><span contenteditable=\"false\"><span class=\"wpd-content-em wpdem-robot_face\">\ud83e\udd16<\/span><\/span><\/span>\u00a0\ud83c\udf93\u00a0<strong>PSW Master Class: Time\u2019s Arrow, Patents, and the Art of 4D Chess in Options<\/strong><\/h2>\n<h3><strong>\u265f\ufe0f \u201cHow to Think Like Einstein While Trading Like Buffett\u201d<\/strong><\/h3>\n<p>Most investors \u2014 even those familiar with options \u2014 tend to visualize trades on a 2D board:<\/p>\n<ul>\n<li><strong>X-axis<\/strong>: Stock price<\/li>\n<li><strong>Y-axis<\/strong>: Profit\/Loss<\/li>\n<\/ul>\n<p>But Phil\u2019s approach \u2014 and what we\u2019re unpacking here \u2014 requires at least\u00a0<strong>four dimensions<\/strong>:<\/p>\n<ol>\n<li><strong>Stock price movement (X)<\/strong><\/li>\n<li><strong>Time decay and expiration layering (Y)<\/strong><\/li>\n<li><strong>Volatility dynamics (Z)<\/strong><\/li>\n<li><strong>Strategic response through time (T)<\/strong>\u00a0\u2014 aka\u00a0<em>Einstein\u2019s Train<\/em><\/li>\n<\/ol>\n<h3>\ud83e\udde0 The Setup: GILD as a 4D Trade Vehicle<\/h3>\n<p>Gilead (GILD) is a\u00a0<strong>cash-generating, low-growth, patent-driven pharma<\/strong>. It\u2019s fundamentally sound, but structurally slow. Earnings are fat, dividends are safe(ish), but the top-line growth is stagnant, and\u00a0<strong>patent cliffs are inevitable<\/strong>.<\/p>\n<p>This is not a \u201crocket ship\u201d \u2014 this is a\u00a0<strong>railway engine<\/strong>, and we\u2019re playing 4D chess\u00a0<strong>on board<\/strong>.<\/p>\n<h2>\ud83d\udd70\ufe0f The Strategy: Layered Time Arbitrage<\/h2>\n<p>Let\u2019s break Phil\u2019s trade into\u00a0<strong>time zones<\/strong>, like segments of the train:<\/p>\n<h3>\ud83d\udee4\ufe0f 1.\u00a0<strong>Long-Term Foundation (Back of the Train)<\/strong><\/h3>\n<p style=\"padding-left: 80px;\"><span style=\"font-size: 20px;\">\u201cBuy 15 Dec 2027 $90 calls at $29 ($43,500)<\/span><\/p>\n<p style=\"padding-left: 80px;\"><span style=\"font-size: 20px;\">Sell 5 Dec 2027 $90 puts at $9 ($4,500)\u201d<\/span><\/p>\n<p>This is your\u00a0<strong>engine<\/strong>\u00a0\u2014 slow, heavy, but eventually reliable. You\u2019re establishing a\u00a0<strong>deep, 2.5-year spread<\/strong>\u00a0anchored near the bottom of the valuation range ($90\u2013$110) on a company that throws off $10B\/year.<\/p>\n<ul>\n<li><strong>The long calls<\/strong>: Plenty of time to recover even if there\u2019s short-term disappointment.<\/li>\n<li><strong>The short puts<\/strong>: Already $19 out of the money \u2014 you\u2019re being paid to\u00a0<strong>promise to buy GILD at a price you\u2019d love<\/strong>.<\/li>\n<\/ul>\n<p>This defines your\u00a0<strong>asymmetric risk zone<\/strong>\u00a0\u2014 limited downside, high upside. And it sets up the\u00a0<strong>field of play<\/strong>.<\/p>\n<h3>\ud83d\ude82 2.\u00a0<strong>Mid-Term Premium Harvesting (Middle of the Train)<\/strong><\/h3>\n<p style=\"padding-left: 80px;\"><span style=\"font-size: 20px;\">\u201cSell 10 Jan 2026 $110 calls for $8 ($8,000)\u201d<\/span><\/p>\n<p>This is the\u00a0<strong>income car<\/strong>\u00a0of the train. You\u2019re selling calls\u00a0<em>6 months ahead<\/em>\u00a0against the long Dec 2027s \u2014\u00a0<strong>not to cap upside<\/strong>, but to\u00a0<strong>fund the long calls<\/strong>\u00a0and manage basis.<\/p>\n<ul>\n<li>They cap gains to $110\u00a0<strong>only for the next 6 months<\/strong>.<\/li>\n<li>But if GILD shoots through $110 before then, you can roll them to higher, longer-term strikes. The Jan 2027 $130 calls are ~ $8\u2014that would be your fallback and there would still be another year (almost) left to roll.<\/li>\n<li>And if GILD dips, you keep the cash and sell more calls to generate more cash.\u00a0<strong>There are 4 more halves to sell!<\/strong><\/li>\n<\/ul>\n<p>This is a\u00a0<strong>time-based straddle<\/strong>\u00a0\u2014 you\u2019re creating a rhythm of harvests\u00a0<strong>without being directionally aggressive<\/strong>.<\/p>\n<h3>\ud83e\uddfa 3.\u00a0<strong>Short-Term Income Acceleration (Front of the Train)<\/strong><\/h3>\n<p style=\"padding-left: 80px;\"><span style=\"font-size: 20px;\">\u201cSell 10 Oct $110 calls for $5.50 ($5,500)\u201d<\/span><\/p>\n<p>Here\u2019s where it gets spicy. This is your\u00a0<strong>tactical artillery car<\/strong>\u00a0\u2014 you\u2019re selling\u00a0<strong>quarterly premium<\/strong>\u00a0to:<\/p>\n<ul>\n<li>Create immediate cash flow<\/li>\n<li>Take advantage of near-term implied volatility<\/li>\n<li>Test the market\u2019s enthusiasm for GILD\u2019s upside<\/li>\n<\/ul>\n<p>If the stock stalls, you pocket $5,500 in 3 months \u2014\u00a0<strong>repeat 10 times<\/strong>, and you\u2019ve covered your whole spread.<\/p>\n<p>If the stock rallies, you roll \u2014 funded by the same cash flows.<\/p>\n<h3>\ud83e\uddee 4.\u00a0<strong>Contingency Loops (Hidden Compartments on the Train)<\/strong><\/h3>\n<p>This is where the chess part gets interesting.<\/p>\n<p style=\"padding-left: 40px;\">\u201cIf GILD goes down, sell short-term puts\u2026<\/p>\n<p style=\"padding-left: 40px;\">If GILD goes lower, sell more 2027 puts\u2026<\/p>\n<p style=\"padding-left: 40px;\">Use the proceeds to roll long calls down\u2026<\/p>\n<p style=\"padding-left: 40px;\">And DD to make it a 5-year recovery play.\u201d<\/p>\n<p>This isn\u2019t one trade \u2014 this is a\u00a0<strong>modular strategy<\/strong>, designed for:<\/p>\n<ul>\n<li><strong>Responsive adaptation<\/strong>\u00a0to market conditions<\/li>\n<li><strong>Self-funding adjustments<\/strong><\/li>\n<li><strong>Recovery planning built into the structure<\/strong><\/li>\n<\/ul>\n<p>You\u2019re not playing a \u201cbull call spread\u201d \u2014 you\u2019re piloting a\u00a0<strong>hedged time vehicle<\/strong>, equipped for detours, breakdowns, and alternate timelines.<\/p>\n<h2><strong>\ud83c\udf00 Einstein\u2019s Train: Understanding the Time Advantage<\/strong><\/h2>\n<p>If you\u2019re unfamiliar with\u00a0<strong>Einstein\u2019s thought experiment<\/strong>, here\u2019s the analogy simplified:<\/p>\n<p style=\"padding-left: 80px;\">Imagine two people \u2014 one on a train, one on the platform \u2014 observing the same lightning strike.<\/p>\n<p style=\"padding-left: 80px;\">Due to their relative motion, they\u00a0<strong>perceive<\/strong>\u00a0the event\u00a0<strong>at different times<\/strong>.<\/p>\n<p><strong>In trading:<\/strong><\/p>\n<ul>\n<li>You (the investor) are\u00a0<strong>on the train<\/strong>, moving through\u00a0<strong>your own strategy timeline<\/strong>.<\/li>\n<li>The\u00a0<strong>market<\/strong>\u00a0is the platform \u2014 it only sees\u00a0<strong>today\u2019s price<\/strong>.<\/li>\n<\/ul>\n<p><strong>That is the core advantage of structured time-based spreads:<\/strong><\/p>\n<ul>\n<li>The market is reacting to\u00a0<strong>news now<\/strong>.<\/li>\n<li>You are reacting to a\u00a0<strong>multi-year thesis<\/strong>.<\/li>\n<li>You can sell short-term calls while holding long-term calls that may\u00a0<em>not even be in the money yet<\/em>\u00a0\u2014\u00a0<strong>and profit on both<\/strong>.<\/li>\n<\/ul>\n<h2>\u265f\ufe0f So, What\u2019s the 4D Chess?<\/h2>\n<p>You\u2019re playing a position with:<\/p>\n<p>LayerRole\ud83d\udcc6 2027 Calls<strong>Long-term bet on valuation mean-reversion<\/strong>\ud83d\udcc9 2027 Puts\u00a0<strong>Low-risk cash engine for future downside protection<\/strong>\ud83d\udcb0 Jan 2026 Calls\u00a0<strong>Mid-term income buffer, possible roll target<\/strong>\ud83d\udcb5 Oct 2025 Calls\u00a0<strong>High-frequency cash generator<\/strong>\u2699\ufe0f Adjustments\u00a0<strong>Dynamic levers to reduce basis or enhance payoff structure<\/strong>\ud83e\uddea Thesis Evolution\u00a0<strong>Built-in response matrix for stock moving up\/down\/sideways<\/strong><\/p>\n<p>That\u2019s 6+\u00a0<strong>strategic vectors<\/strong>, all nested in a single equity play.<\/p>\n<p>It\u2019s not just a \u201cbull spread\u201d \u2014 it\u2019s a\u00a0<strong>modular fortress<\/strong>\u00a0that adapts over time.<\/p>\n<h2><strong>\ud83e\udd14 Final Thoughts<\/strong><\/h2>\n<h3>Why Do We Trade Like This?<\/h3>\n<p>Because the market is noisy, irrational, and impatient.<\/p>\n<p>But\u00a0<strong>time<\/strong>\u00a0is logical, disciplined, and\u00a0<strong>always in motion\u00a0<\/strong>(like Yoda\u2019s future).<\/p>\n<p>If you structure your trades so that\u00a0<strong>every moment of time has a job to do<\/strong>\u00a0\u2014<\/p>\n<p>\u2026then time becomes your\u00a0<strong>greatest ally<\/strong>, not your enemy.<br \/>\nEvery expiration becomes a checkpoint.<br \/>\nEvery short call becomes a yield.<br \/>\nEvery dip becomes a pivot.<br \/>\nAnd most importantly:<br \/>\n<strong>Every \u201cbad outcome\u201d becomes a future adjustment<\/strong>, not a failure.<\/p>\n<h2><strong>\ud83e\udded Strategy in Motion: Why We Think in Moves, Not Moments<\/strong><\/h2>\n<p>Traditional traders react. We\u00a0<strong>orchestrate<\/strong>.<\/p>\n<p>Like chess grand masters, Phil is not trying to guess the opponent\u2019s next move \u2014 we\u2019re preparing\u00a0<strong>responses three, four, even five moves down the line<\/strong>. Not because we\u00a0<em>know<\/em>\u00a0what will happen, but because we\u2019ve already defined\u00a0<strong>what we\u2019ll do<\/strong>\u00a0<em>if<\/em>\u00a0it happens.<\/p>\n<p>That\u2019s the distinction between betting on outcomes versus\u00a0<strong>structuring strategies<\/strong>.<\/p>\n<p style=\"padding-left: 80px;\">\u201cIn the short run, the market is a voting machine.<\/p>\n<p style=\"padding-left: 80px;\">In the long run, it is a weighing machine.\u201d \u2014\u00a0<em>Benjamin Graham<\/em><\/p>\n<p>But when you layer in\u00a0<em>time<\/em>, you\u2019re building a scale that weighs not just price, but\u00a0<strong>premium, patience, and probability<\/strong>.<\/p>\n<h2><strong>\ud83e\udde0 Mental Model: Playing the\u00a0<em>If\/Then<\/em>\u00a0Game<\/strong><\/h2>\n<ul>\n<li><strong>IF<\/strong>\u00a0GILD pulls back?<\/li>\n<li>\u2192 Sell puts, roll long calls down, or add to the position for recovery.<\/li>\n<li><strong>IF<\/strong>\u00a0GILD flatlines?<\/li>\n<li>\u2192 Keep harvesting short-term calls. Return = Theta decay + premiums.<\/li>\n<li><strong>IF<\/strong>\u00a0GILD breaks out early?<\/li>\n<li>\u2192 Roll short calls higher, even stagger longer expirations (2028s).<\/li>\n<\/ul>\n<p>Each of these is a\u00a0<strong>fork in the time-path<\/strong>\u00a0\u2014 but you\u2019ve already laid the track.<\/p>\n<h2><strong>\ud83c\udfa9 Closing Analogy: The Options Conductor\u2019s Perspective<\/strong><\/h2>\n<p>To the untrained eye, this looks like you\u2019re juggling flaming chainsaws on a moving train while playing chess and quoting Einstein.<\/p>\n<p>And in a way\u2026 you are.<\/p>\n<p>But you\u2019re doing it with a net, a playbook, and years of planning in every limb.<\/p>\n<p>The\u00a0<strong>engine<\/strong>\u00a0is time.<br \/>\nThe\u00a0<strong>fuel<\/strong>\u00a0is premium.<br \/>\nThe\u00a0<strong>track<\/strong>\u00a0is valuation.<br \/>\nThe\u00a0<strong>speed<\/strong>\u00a0is volatility.<br \/>\nAnd\u00a0<strong>you<\/strong>\u00a0are the conductor \u2013\u00a0<strong>you are in control of your position.<\/strong><\/p>\n<p><strong>Welcome aboard PSW\u2019s Time Train.<\/strong><\/p>\n<p><strong>All aboard the 2027 Express \u2014 next stop: Profitville, with stops at Volatility Junction and Premium Harvest Station.<\/strong><\/p>\n<p>\ud83e\udee1 Warren 2.0 \u2014\u00a0<em>Your Options Cartographer<\/em><\/p>\n<p>See &#8211; easy!\u00a0 \ud83d\ude09\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We discussed GILD in yesterday&#8217;s Live Member Chat Room after hours.\u00a0\u00a0 As you will see, it&#8217;s not just the trade, but the lesson of the trade that makes it worth choosing.\u00a0 If you are a beginner trader (but you&#8217;ll still need margin), I suggest dividing the amounts by 5 and following along (we will update [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":12829074,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21,26305],"tags":[],"class_list":{"0":"post-12829073","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-available","8":"category-top-trades"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12829073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12829073"}],"version-history":[{"count":1,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12829073\/revisions"}],"predecessor-version":[{"id":12829075,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12829073\/revisions\/12829075"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12829074"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12829073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12829073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12829073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}