Options Action: Western Digital
Considering results from Intel showed corporate spending for large server farms was much stronger than expected, how should you game Intel rivals?
Mike Khouw of Cantor Fitzgerald suggests looking at Western Digital but rather than taking a long position in stock, he thinks you can profit through options.
He’s a seller of the Aug 32 puts @1.60
It’s a bullish bet - not only does Khouw expect the stock to rally in the wake of Intel earnings, but he says it’s also oversold.
In other words he expects the stock to remain above $32 through the third week of August. However it’s worth noting that if Khouw is wrong and the stock falls –you could have the stock put to you at $32 – meaning you’d have to buy it for $32/share.
* Learn more about his trade. Watch the video now!
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CNBC.com with wires