The patented options-trade picking algorithms used by MarketIntelligenceCenter.com found a trading opportunity with F5 Networks Inc (FFIV) that should provide a 6.27% return in just 136 days.
Sell one Apr. '16 call at the $100.00 level for each 100 shares of F5 Networks for a net debit per share of $94.10. That net debit also serves as the break-even point for this trade, giving it 8.64% downside protection.
For a riskier play with a higher potential rate of return, consider buying the Jan. '17 call at the $55.00 at about $50.70 instead of taking a long position in the stock. This lowers your net debit to $41.80, but the stock has to close above $96.80 at expiration to keep this trade from losing money.
Standard & Poor’s gives the stock a $140.00 12-month target price and a 4 STARS (out of 5) buy ranking. Technical indicators for the stock are bearish and support has been about $102.34 with resistance around the $104.10 level.
FFIV closed Monday at $103.00 after trading between $102.89 and $103.77. In the past year, the stock has hit a 52-week low of $100.32 and 52-week high of $136.11.