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Basic Strategies for Big Profits in Any Market

Buy Call HPE

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:

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PositionHPE January 22 Calls
Position StrategyBuy Call
Opened DateJune 20, 2024
ExpirationJanuary 17, 2025
Net Price2.73
Strike3
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.