New Trade $CSCO: Low Risk, Low Premium Way To Play For Expected Weak Q4 Guidance

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CSCO reports their fiscal Q3 tonight after the close (read our preview from yesterday below), the options market is implying about a 6% move this afternoon, vs the avg over the last 4 qtrs of about 7%. The move looks to be priced fair.  We concluded yesterday that the stock trading at about the mid-point of the 6 month range appears to be in no mans land, which is basically inline with the sentiment towards the company’s fundamentals.  While Q3 likely saw a drop off towards the end of the qtr due to corporations caution towards global growth, the forward guidance is what is likely going to move the stock after the print.

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Original Post Nov 12th, 2012: CSCO Q3 Earnings Preview

Event:  CSCO reports Q3 earnings Tuesday, November 13th after the market close.  The options market is implying about a 6.5% move on earnings, which is quite low relative to the 8-quarter average of 10%, but close to the 4 quarter average around 7%.  

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