Monday, June 6, 2011

Cisco - Did I say $17.....I meant $16

Previously CCI bought the first lot of Cisco trade via Jan, ITM call options.

At that time CCI felt $17 was a good entry price.
Clearly, what I meant to say is $16 is a good entry
That is where it is trading now.

Having looked a little more closely at past earnings reports the drop in revenues in some of the core products is a little disturbing. However, the overall fundamental value still seems sufficient to justify a trade.

Sold $16 June puts today for $.25 after commissions. If held for the next 10 days either
- the stock will continue to fall and the second lot of the trade will be acquired at an effective price of about $15.75.
- the stock will hold the $16 level and the portfolio will make about $1.5% in 10 days.

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