While most of the S & P 500 has reported first quarter earnings, three notable names — where the options trade quite actively — have yet to report. One of those is Oracle and I will show how one could trade it here. Oracle Corp , which is scheduled to report on June 11 after the close, is of significant importance as it could potentially influence trading strategies. Following this, Broadcom Inc. will report on June 12th after the close, and Adobe Inc. on June 13th after the close.
will need to rise nearly 5% for those calls to break even. However, the elevated premium is understandable given that the most recent 3 of the past four quarterly earnings releases saw double-digit moves. So, options traders are generally bullish. Sell-side analysts are mostly bullish with 21 buys, 15 holds, and one sell with an average analyst price target of nearly $139, just over 13% higher than the current stock price. The trade I'm willing to play along, but I have two caveats.
YTD mountain Oracle, Year-to-date A more cautious approach to a bullish bet on Oracle could be to buy call options. For instance, the September $125 calls not only capture next week's earnings, but are also likely to capture the subsequent earnings, estimated for the second week of September. One could offset a portion of this cost by selling a June 14th weekly $130 call.
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