Subject: Arista Networks (ANET) Hits Fresh All-Time Highs, What’s Next?

 

Terrys Tips newsletter
     

Dear Friend,

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to spot outperforming stocks and place spreads that profit if the momentum continues.  Actually, the stock can even decline a little for the maximum gain to be made.

The 10 portfolios carried out by Terry's Tips for its paying subscribers had its best week ever last week, gaining an average of 9.1%.  The composite portfolio average for 2017 has soared to 120%.  Isn’t it time for you to see exactly how we are doing it? 

Terry 

 
Option Tip of the Week

Arista Networks (ANET) Hits Fresh All-Time Highs, What’s Next?

Arista Networks (ANET) Hits Fresh All-Time Highs, What’s Next?

Several analysts are optimistic about Arista Network’s future following their earnings report last week, here are two of them – Arista Networks Keeps Enjoying Soaring Sales and Why Shares of Arista Networks Are Surging Today.

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Technicals

ANET fell under pressure last week ahead of its earnings report, falling just over 10% in a two-day correction.  The turn lower led to a break of the 20 period daily moving average as well as a rising trendline that had been in play for nearly three months.  However, the stock recovered after the earnings beat and closed the week out at a fresh all-time high.  Although the rising trendline is no longer in play as support, the break back above it as well as the moving average signals that buyers have regained control.

 ANET Graph November 2017

*source Tradingview.com

If you agree there's further upside ahead for Arista Networks, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next six weeks.

Buy To Open ANET 15Dec17 195 Puts (ANET171215P195)

Sell To Open ANET 15Dec17 200 Puts (ANET171215P200)for a credit of $2.23 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when ANET was trading near $201.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $221 and your broker would charge a $500 maintenance fee, making your investment $279 ($500 – $221).  If ANET closes at any price above $200 on December 15, 2017, both options would expire worthless, and your return on the spread would be 79% (741% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

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Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates November 2, 2017

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

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Any questions?   I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts. seth@terrystips.com

You can see every trade made in the actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here.   Why wait any longer to make this important investment in yourself?

I look forward to having you on board, and to prospering with you.

Terry
 

 


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Testimonial of the Week

It is often said that options are to stock trading as chess is to checkers. I was looking to find the chess master amongst the checker's champs, and Terry is the one. Looking for the very smart yet understandable way to trade options? Look no further.

~ Phil

     

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Sincerely,
Dr. Terry Allen
Terry's Tips

 
 
Week 459

November 6, 2017
 
tastyworks
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