In what many analysts are describing as a surprising move, Adobe Systems (ADBE) is giving away the source code to its popular flash player. This move is akin to Microsoft (MSFT) giving away its Windows’ source code to allow software developers the ability to create applications for the Windows platform. The opposite of this was Apple’s (AAPL) decision to keep its operating systems source code a secret.
The thought behind this is to inspire web application development companies to use the versatility of the flash player as a platform to develop spreadsheets, calculators, document editors and a multitude of other web-based programs.
The flash player was a tool upon which the YouTube phenomenon was built. It is the hope of Adobe management that other such powerful applications will result from this open source project.
Adobe contributed code to the Mozilla foundation, which provides the free Firefox web browser. Mozilla will manage the open-source project, called Tamarin ( mozilla.com ). The stated goal of the project from the mozilla.org website is to, “create and deliver richer, more interactive experiences that work across multiple platforms.”
Many analysts feel this project could be the template upon which the next generation of common applications is built. Meaning most word processing programs, spreadsheet programs, and gaming will be done online in a browser setting. ( mobileopportunity.blogspot.com )
If we are really seeing the seed of a web-based application revolution, this could be a good time to look at Adobe Systems. In the words published on the Mozilla website, “Adobe and Mozilla hope to accelerate the adoption of the standard language for creating engaging web applications.” Even Business magazine’s new blog-content filled “Business 2.0” is touting the development. (Source: blogs.business2.com )
If the investing community believes the premise, we can presume it will bet on Macromedia/Adobe’s stock rising. Turning to PowerOptions’ StategySearch Summary Tool to investigate covered calls for the month of December is our next step. When doing this we should keep in mind the covered call trading tips listed on the PowerOptions website – the sage advice posted there states, “the objective is to do ten trades at 4% not two trades at 20%. Don’t try to over push the return.”
| Covered Calls ADOBE SYSTEMS INC (ADBE) $39.61 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Expiration &Strike |
Opt. Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd |
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| AEQLH | 06 DEC 40.00 | $1.50 | 3.80% | 3.90% | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As you can see this trade provides reasonable downside protection (3.8%) while offering respectable potential profits (3.9 to 5%) on a respectable stock. And, if Adobe Systems’ vision pans out the stock could be a repeat winner in the years to come.
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[tags]AAPL, Apple Computer Inc., ADBE, Adobe Systems Inc., MSFT, Microsoft Corp., covered call investment strategy, covered call trading tips, investment strategy, iron condor, option income, poweroptions, stock option trading, stock options[/tags]