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A ‘strangle’ options trade on a top cybersecurity stock reporting after the bell


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A ‘strangle’ options trade on a top cybersecurity stock reporting after the bell

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. Justifiable, but it is a bit higher than the company’s historical valuation multiples. Two-year historic multiples would price the stock somewhere between $270 and $290/share, so a reversion to a mean multiple could drop the stock somewhere in that ballpark. Consequently, I’m inclined to play a range-bound thesis ; selling a near-dated May 24th weekly $285/$350 strangle (selling the $285 puts and $350 calls), hedged by purchasing a longer-dated strangle of approximately the same strikes, specifically the September $280/$350 strangle. Note that there are no September $285 puts listed, or else I would likely have chosen those instead. Sell May 24 $285 put Sell May 24 $350 call Buy Sep. 20 $280 put Buy Sep. 20 $350 call Some premium will come out of the longer-dated strangle post-earnings, but a decent amount of that premium should be preserved because it also captures the company’s subsequent earnings release in August. DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.





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Breaking News: Markets,Markets,Personal finance,Palo Alto Networks Inc,Palo Alto,Nikesh Arora,business news
#strangle #options #trade #top #cybersecurity #stock #reporting #bell

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