This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What Options Traders Expect When Cisco Reports

NEW YORK (TheStreet) -- Internet routing hardware maker Cisco Systems (CSCO - Get Report) is expected to report earnings after the market closes on May 14. Investors aren't expecting an improvement in earnings. The average estimate is currently 48 cents a share, falling 3 cents (5.9%) from 51 cents during the matching period last year.

CSCO Chart

Analysts are estimating as low as 47 cents per share, up to the most optimistic estimate of 49 cents per share. I believe Cisco will top the consensus and earns at least 49 cents.

During the last 52 weeks, the stock traded in a range of $20.22 to $26.49, and we are more or less right in the middle, albeit just above the 200-day moving average.

Must Read: The Company Most Likely to Collapse in 2014

If we take a look at the options market, clues will emerge to what other investors are anticipating and thinking. Currently, based on call and put option trading, the market is expecting about a 6% or less price move. Options are pricing in a range of $21.57 to the downside and $24.31 at the upper end.

In order to profit from buying puts or calls, Cisco will have to move beyond those levels or you'll risk being right and still losing. The flip-side is if you think the shares will stay within that range, you can sell option premium in the earnings front contract and profit if you're correct.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CSCO $26.44 -1.60%
AAPL $94.25 -0.98%
FB $118.18 0.64%
GOOG $696.51 0.60%
TSLA $230.09 -0.96%


Chart of I:DJI
DOW 17,683.28 -67.63 -0.38%
S&P 500 2,054.23 -9.14 -0.44%
NASDAQ 4,739.8820 -23.3420 -0.49%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs