I've been thinking long and hard about what my next options play would be. During the last options period, I made about 300% with RIMM puts. Anyway, VMW is a stock that seems perpetually locked in a range. Roughly 80 to 110. And it seems like with the latest earnings, and a positive reaction to them, including VMware's 1.2B acquisition of Nicira, a company that does SDN (software-defined networking) and virtualized networking. Nicira being a company once viewed as a real threat to CSCO, VMW is now viewed as beginning to encroach on behemoth Cisco's turf.
I think this is a very positive development and SDN is an area VMW should be in. This is old news to anyone who knows this stock but we're in a long, pervasive trend away from hardware manufacturers (like DELL or HPQ) toward virtualization leaders, cloud computing providers, and other solutions that go away from the old, server-room model.
In the next few weeks I am setting up a new service with Ditto Trade which will allow you to follow along with trades I make as they happen, including lucrative options trades.
Stay tuned for the details, but basically Ditto Trade is an innovative brokerage that allows what they call "lead traders" offer a service, to anyone who wants to sign up, of their actual stock moves. A follower can choose to go "full throttle" and be part of each trade the lead trader makes, or simply get alerts as they happen and then decide how to act.
I've crunched the numbers here and I forecast a 119% profit if VMW gets to $98 or above before August options expiration, and have bought $90 calls for 3.60 accordingly.