Summer is in full swing, and, man, is it a scorcher. We've already had some record-breaking temperatures, and the dog days of summer have just begun. To help take your mind off the sweltering heat, we're bringing you four option trades that should deliver some cool profits before the end of the year.
By Sam Collins With the uncomfortable temperatures we're experiencing this summer, it's great to turn up the air conditioning and settle in with a movie from Netflix ( NFLX). The company's earnings per share have increased from $1.79 to an estimated $2.67 in the past five quarters, and analysts' estimates have recently been raised. But the stock had such a sharp run-up that many analysts backed off from recommending it at higher prices despite its 34% growth in Q2 net income. Netflix is benefitting from decreased competition from rental stores and from its growing use of streaming video over Xbox 360, Nintendo Wii and Sony PS3. The stock has pulled back to around $100, falling from its high of $126 in June. Most analysts target the stock at $110 to $126 by year-end. Buy the NFLX Sept 100 Calls with a target of $16.
By Sam Collins EMC ( EMC) is one of the world's largest suppliers of enterprise storage systems, software and services. So if you're going to enjoy some streaming video from Netflix, the chances are that your hard drive and other storage media used to accomplish that feat were made by EMC. The company's revenues are expected to increase by 18% in 2010, according to S&P, which rates the stock a "five-star strong buy." And its future appears bright since data storage needs are expanding exponentially. Buy the EMC Oct 20 Calls with a target of $4.