SHORT ORCL
Oracle Corporation (ORCL) has recently experienced a decline due to underwhelming earnings and concerns over its valuation.
The stock is currently trading at $183.47. Given the elevated implied volatility in the options market, a short call strategy may be more cost-effective than purchasing puts.
Trade Plan Details
1. Short Call Strategy:
Strike Price: $190 (above current trading price)
Expiration: March 2025
Premium: Collect premium by selling call options at this strike.
2. Position Sizing:
Contracts: Determine the number of contracts based on your risk tolerance and account size.
Risk Management: Ensure the total potential loss does not exceed your predefined risk threshold.
3. Profit Target:
Objective: Profit from the premium received, anticipating that ORCL will stay below the $190 strike price by expiration.
4. Stop Loss:
Exit Strategy: If ORCL's price approaches the strike price, consider closing the position to limit potential losses.
Rationale
Earnings Performance: Oracle's recent earnings report showed revenue of $14.06 billion, slightly below expectations, leading to a stock decline.
Valuation Concerns: Analysts have downgraded Oracle due to overvaluation concerns, suggesting the stock may face further downward pressure.
Implied Volatility: Elevated implied volatility makes selling options, such as short calls, potentially more profitable due to higher premiums.
The stock is currently trading at $183.47. Given the elevated implied volatility in the options market, a short call strategy may be more cost-effective than purchasing puts.
Trade Plan Details
1. Short Call Strategy:
Strike Price: $190 (above current trading price)
Expiration: March 2025
Premium: Collect premium by selling call options at this strike.
2. Position Sizing:
Contracts: Determine the number of contracts based on your risk tolerance and account size.
Risk Management: Ensure the total potential loss does not exceed your predefined risk threshold.
3. Profit Target:
Objective: Profit from the premium received, anticipating that ORCL will stay below the $190 strike price by expiration.
4. Stop Loss:
Exit Strategy: If ORCL's price approaches the strike price, consider closing the position to limit potential losses.
Rationale
Earnings Performance: Oracle's recent earnings report showed revenue of $14.06 billion, slightly below expectations, leading to a stock decline.
Valuation Concerns: Analysts have downgraded Oracle due to overvaluation concerns, suggesting the stock may face further downward pressure.
Implied Volatility: Elevated implied volatility makes selling options, such as short calls, potentially more profitable due to higher premiums.
Trade fermée: cible de profit atteinte
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.