AKAM – Akamai Technologies (Last:19.22)

Akamai’s rally is nearing a level where we might be able to spread off the risk of the four August 25 calls we bought a while back for 0.90. Let’s offer four August 27 calls (UMUHI) short for 0.95, good till canceled. If the order fills, we will have legged on a $2 vertical bull spread for a small credit. It will give us a position with no possible loss, a minimum gain of $20, and a maximum of $800 if the stock is trading above 27 come August expiration. My guess is that AKAM will have to reach $24 (or so) to fill our short offer at 0.95 by mid-June. _______ UPDATE June 21):  The stock turned instantly into garbage with last Wednesday’s gap-down opening; however, because it’s due for a dead-cat bounce, let’s try to exit our calls somewhat above the market. Offer them to close for 0.70, good till canceled.  Make that offer one-cancels-the-other with an order to sell the calls on a 0.40 stop-limit. _______ UPDATE (6/22 11 a.m.):  We exited the calls near the opening, realizing a loss of about $200.  The reason we bought the options in the first place was to take a flyer on a stock that Motley Fool had touted as, more or less, the Stock of the Century.  The 22nd Century, perhaps. Let’s hope they record the loss, just as we have.

Tagged as: AKAM, Akamai Technologies, Forecast