Buy Call HPE

August 1, 2024
Two Trades: Sell Balance of your CCJ December 55 Calls and a Third of HPE January 22 Calls.

The market continues to swing violently day to day … and I mean VIOLENTLY. Today is one of those bad days (SPY down 1.1%, QQQ down 1.7%, IWM lower by 3.5%).

Regardless, with more and more stocks breaking down, or at least not participating in the up days, let’s de-risk the portfolio even more.

To execute these trades you need to:

Sell to Close your CCJ December 55 Calls

And

Sell to Close a third of your HPE January 22 Calls

CCJ was mostly unchanged on earnings yesterday but is breaking down hard today. It’s time to move on.

And in terms of HPE, it’s far from a disaster, but for now at least, the stock is mostly chopping around/trending lower. Let’s sell a piece and then step back and evaluate the position in the days/weeks to come.

Stepping back to the market, who knows where we are going as every day it’s a new story. And because of that volatility, I continue to preach patience.

There will be a time to buy again, but for now at least, it feels like building a watchlist is the best course of action.

June 20, 2024
Buy the Hewlett Packard Enterprise (HPE) January 22 Calls (exp. 1/17/2025) for $3 or less.

As I wrote Tuesday, option activity has been red hot in HPE as the stock has made new highs for the last month. And that call buying is continuing today, including a trade below, and some of the aforementioned call buys recently:

Today - Buyer of 1,800 Hewlett Packard (HPE) July 23 Calls (exp. 7/12) for $0.65 – Stock at 22.35

Tuesday - Buyer of 5,000 Hewlett Packard (HPE) November 24 Calls for $2.05 – Stock at 22.5

Tuesday - Buyer of 5,000 Hewlett Packard (HPE) September 23 Calls for $1.60 – Stock at 22.

While I think it’s possible the AI theme that has likely aided HPE could be due to cool off in the short term, the price of the HPE January 22 calls is so cheap that I’m willing to take the risk.

To execute this trade you need to:

Buy to Open the HPE January 22 Calls

The most you can lose on this trade is the premium paid, or $300 per call purchased.

The risks I see in this trade are pretty straightforward …

The market could be due to cool off

Or

The monster AI run could be nearing its end.

And while those are real risks, should the market continue to move higher, I think HPE has a great set-up, and to pay $3 for a call in an emerging stock star with seven months until its expiration is a great risk/reward.

Finally, here is a note from JPMorgan on HPE from this morning regarding its collaboration with NVDA: