Weekend Trader Series
October 20, 2024
Open Positions Update
- Please extend the scheduled time-stop date on the Iron Mountain (IRM) November 15, 2024, 105-strike call to Monday, November 4.
- The Cardinal Health (CAH) December 20, 2024, 105-strike call reaches its time-stop this Monday, October 21. Close the position at a limit price within range of the current market price when you place the order.
The following is this week's recommendation:
Ciena Corporation (CIEN)Place a limit order to buy the Ciena Corporation (CIEN) January 17, 2025 62.50-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, October 18, this option was offered at $7.00. CIEN closed at $65.33 on Friday, October 18.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, November 18, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of software company Ciena (CIEN) recently broke above the $61.50-$63 area, where sellers emerged multiple times since 2020. The equity is now trading above $65.34, a level where CIEN was vulnerable to profit-taking from those anchoring to the 50% bounce from the April 2024 closing low. With this strong technical foundation in place, we’re recommending a new long position on CIEN.
More than 9,000 October 70 calls expired on Friday, the site of last week’s peak. A call-heavy October open interest (OI) configuration is turning into a put-heavy OI configuring as we head into November expiry, an options-related tailwind to monitor.
Short interest is at a three-year highs and is triple Ciena stock’s average daily volume. There’s room for upgrades too, as the security hit a new 52-week high last week and is outperforming since the start of 2024 with a 46.5% year-to-date lead. Of the 17 covering brokerages, seven still rate CIEN a tepid “hold.”
Our recommended January 17, 2025 62.50 call has a leverage ratio of 6.0, and will double on a 17.2% pop in the underlying shares.
Most Recent Recommendations
The information contained herein is intended solely for the individual subscribers, is not intended for institutional investment organizations, and is not legal to be rebroadcast. Please click here for full disclaimer details.
Limitation on Schaeffer's Investment Research (SIR) liability: SIR liability, whether in contract, tort, negligence, or otherwise, shall be limited in the aggregate to direct and actual damages not to exceed the fees received by SIR from Subscriber. SIR will not be liable for consequential, incidental, punitive, special, exemplary or indirect damages resulting directly or indirectly from the use of or reliance upon any material provided by SIR. Without limitation, SIR shall not be responsible or liable for any loss or damages related to, either directly or indirectly, (1) any decline in market value or loss of any investment; (2) a subscriber's inability to use or any delay in accessing SIR website or any other source of material provided by SIR; (3) any absence of material on SIR website; (4) SIR failure to deliver or delay in delivering any material or (5) any kind of error in transmission of material. SIR and Subscriber acknowledge that, without limitation, the above-enumerated conditions cannot be the probable result of any breach of any agreement between SIR and Subscriber.