Monday, August 29, 2011

Trade of the Day: Network Appliance (NTAP) September $39/$33 Bull Risk Reversal

The Trade
Trade executed was the September $39/$33 bull risk reversal 20,000x for a $.08 debit. Profit potential is unlimited. Break even is $39.08.

Shares are down, but have bounced from support near $34 since earnings. Recent large bullish activity seems to suggest the name has bottomed. Just last week you might remember, NTAP was a prior trade of the day.

$13.6B market value, trades 13x earnings, 1.3x PEG, 2.9x cash value and 12x cash flow.

Alternative trade would be the September $33/$31 put bull vertical and the September $39/$41 call bull vertical for a total debit of $.31. Trade offers sufficient profit potential with less risk.


Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow!

No position at this time. Position declarations are believed to be accurate at time of writing but may change at any time and without notice.

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