Tuesday, August 19, 2008

Quick Update

Taking a chance here with some Hewlett Packard (HPQ) calls ahead of their earnings release this afternoon. Made a small bet on the Sept $45 calls (HPQII) at $1.25. I rarely play out of the money options and tend to do spreads, but this time, I think there's a real chance for a move in the next month given all the negativity surrounding tech these days. It won't be too long before we see how this works out.

*** Edit #1 ***

So far so good. The numbers came out, and it looks like HPQ beat Wall Street estimates on both the top and bottom lines. Looks like they are guiding slightly above consensus as well, but I'm not 100% sure on that. I suppose the next thing to listen for on the call is how the EDS integration is progressing, and also how the competitive landscape is looking these days.

At least for right now, the move is clearly to the upside with shares trading at $45. I picked up the calls when shares were hovering in the 43.60's. Hope there are no bombs dropped during their conference call. Later, people.

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