Citrix Systems (CTXS) call option volume was up yesterday and the company’s stock price was down about 4%.
Citrix’s products enable its customers to host software on a centralized server. This enables its customers to decrease costs for supporting software applications. Instead of having hundreds of remote PC’s to keep up-to-date, support staff only has to keep the centralized server up-to-date.
Citrix also provides products for collaboration, GoToMeeting enables online virtual meetings. GoToWebinar enables online webinars. GoToMyPC enables secure remote access to a PC from anywhere.
Citrix has some pretty stiff competition: Cisco Systems (CSCO), F5 Networks (FFIV) and VMware (VMW).
Citrix’s stock has been on a tear in the last seven months with an increase of around 100%. Citrix’s stock price took a pretty good haircut following its recent earnings report. Citrix had a fairly good earnings report, but it would have needed blowout results in order to justify its lofty P/E of 48.
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Citrix’s November 40 call option saw significant volume yesterday. The November 40 call option was slightly out-of-the-money. Its corresponding November put option also saw heavy volume, but not as much as in the call option. Citrix’s call option action yesterday has a bullish look to it. Citrix would make a good acquisition for a company like Cisco.
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A covered call investing position for Citrix for December looks interesting with a %if assigned potential return of 5.1%. The time frame for potentially realizing the return is only 57 days. The call option to sell would the December 40 with a ticker symbol of XSQLH.
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To enter the covered call investing position an investor would purchase the stocks in multiples of 100 shares for their trading portfolio and sell one call option for each 100 shares of stock purchased for their personal stock portfolio.
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[tags] GoToMeeting, GoToWebinar, GoToMyPC, out-of-the-money, CSCO, Cisco Systems Inc., CTXS, Citrix Systems Inc., FFIV, F5 Networks Inc., VMW, VMware Inc. [/tags]