Buy Call ORCL

December 6, 2024
Adjust Existing Position: Against ORCL March 160 Calls, Sell the March 240 Calls for $2.50 or more.

ORCL will report earnings Monday after the market close and the stock looks terrific. Let’s take advantage of this stock strength, and our deep in-the-money call, to sell a call $50 out-of-the-money to collect some premium.

To execute this trade you need to:
Sell to Open the ORCL March 240 Calls

After this sale our net position will be:
Long ORCL March 160 Calls
Short ORCL March 240 Calls

Please note, despite the fact that we are selling a call today, there is no question this position is still wildly bullish.

This sale will drop our cost basis on our position to $12.40 (approximately).

This sale will be a mistake if ORCL trades well above 240 on March expiration, or 26% higher from here. However, that is a mistake we can deal with as our March 160 calls that were purchased for $14.93 would be worth $80 in that scenario.

Stepping back, my sales of PLTR and HOOD have proven to be a mistake as these stocks have gone BANANAS to the upside. And while I “regret” those sales, in the moment it absolutely seemed like the right way to manage those positions, and I feel the same way about this ORCL adjustment today.

October 8, 2024
Sell a Third of Existing Position: Sell a Third of your ORCL March 160 Calls for $24 or more.

ORCL is breaking out to a new high and looks terrific. And while I think the odds favor the stock continuing to move new highs, just in case the market wobbles on any of the known concerns (Middle East/election season), let’s stick with the system and lock in a profit of approximately 60%, and then go for the grand slam on the balance.

To execute this trade you need to:
Sell to Close a Third of your ORCL March 160 Calls.

September 12, 2024
Buy the Oracle (ORCL) March 160 Calls (exp. 3/21/2025) for $16 or less.

As I wrote earlier this week, Oracle (ORCL) was racing to the top of my watchlist after a big breakout on earnings. And into that strong move higher, option activity was strong that day, and has continued to be so since, including these trades:

Today - Buyer of 2,000 Oracle (ORCL) September 165 Calls for $1.70 – Stock at 162

Today - Buyer of 1,000 Oracle (ORCL) March 175 Calls for $8 – Stock at 161

Monday - Buyer of 6,000 Oracle (ORCL) November 160 Calls for $5.60 – Stock at 157

I really like this setup in ORCL as the stock made a monster move on earnings and has extended those gains in the days that followed, despite some market ups and downs. Let’s get involved via a March call.

To execute this trade you need to:
Buy to Open the ORCL March 160 Calls

The most you can lose on this trade is the premium paid, or $1,600 per call purchased.

The risks I see in this trade are pretty straightforward:

First, the market has been a bit of a sloppy mess as of late, and should things turn sour again, ORCL will almost surely fall.

Second, this ORCL stock move of late is a bit of a play on the AI theme, and as we have seen, that group can get red hot, and ice cold very quickly.

Finally, as is always the case, chasing big earnings gaps can be dicey.

That being said, chasing earnings gaps can also be wildly successful as we have seen countless times over the years. And given this stock strength and option activity, I really like the risk/reward in this ORCL call buy.

Finally, of note, I turned to Cabot Small-Cap Confidential and Early Opportunities Chief Analyst Tyler Laundon to ask him for his read on the recent strength in ORCL shares. Tyler is great at understanding the business opportunities for many companies, and here is what he said:

“Oracle has a proven track record building data centers and continues to push into the AI data center market with acres of NVIDIA GPU clusters at its newest data centers. Its software is used by Microsoft, Google and now Amazon, making Oracle kind of like the Switzerland of the AI database market.”