Pre-Market Alert: VMW Set to Explode
Lock In Profits!
PLAY: Within the first 30 minutes of trading, sell your basket of VMW February 45 Calls (VMW BI) and VMW February 43 Puts (MKT NH) for the best available prices.
Dear Bottarelli Research Member,
Good morning. After yesterday’s close, virtualization software firm VMware (VMW – NYSE) reported numbers that blew Wall Street away.
They reported quarterly revenues of $608 million, which was up 18% from a year ago, and well above the consensus of $553.7 million. For Q1, VMW expects revenue of $580 to $600 million, which was also above the Street’s estimate of $530.3 million. What’s more, for the entire 2010 calendar year, VMW expects revenues of $2.45 to $2.55 billion, which is up 26% from the $2 billion they reported for 2009. But most important of all, this news has pushed shares of VMW up over 15% in pre-market trading.
In terms of our basket of VMW February 45 Calls (VMW BI) and VMW February 43 Puts (MKT NH), we entered both positions for a total of $4.05. Based on the earnings-based pop, I’d think the calls could open the session around $5.00 and the puts could open the session around $0.60, equaling a total basket price of $5.60. That’s good for a 38.27% gainer. Depending on how VMW moves at the open, these figures can certainly change. But when it comes to our position, I don’t want to take any chances. Let’s go ahead and sell both the VMW calls and puts within the first 30 minutes of trading for the best prices you can. As I mentioned above, shoot for overall basket gains between 30% and 50%.
PLAY: Within the first 30 minutes of trading, sell your basket of VMW February 45 Calls (VMW BI) and VMW February 43 Puts (MKT NH) for the best available prices.
I’ll follow up as the trading session progresses. But until then…
Lock and load!
Sincerely,
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