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.
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.
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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.