Buy Alert: February 6, 2015
Buy Alert: February 6, 2015
Trade Details
Buy Red Hat (RHT) March 21st 65 Puts for $2.25 or better (lower)
Why?
RHT is known primarily for its open source software, particularly its Linux-based operating system. The company has been flying under the radar lately, but the stock price has definitely crept up into overvalued territory. Moreover, Microsoft (MSFT), its main competitor, is releasing a host of new products this year which could cut into RHT’s revenues in the short-term.
We’re going to buy March options (puts). Conservative investors can take profits at $62.00. Aggressive investors can hold down to $58.00. For risk control, conservative traders should exit at $68.50, while more aggressive traders can hold to $70.
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