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Second Citrix Systems (CTXS) Trade

March 19, 2009

"Buy to open" the CTXS June 30 Calls (XSQFF) for 65 cents or less and "sell to open" the CTXS June 20 Puts (XSQRD) for $1 or more to collect at least a 35-cent credit


Dear Fellow Options Traders,

Given the stellar outlook for Citrix Systems (CTXS) that we told you about in the earlier CTXS trade, we're recommending an additional way to profit for those of you who are comfortable selling puts.

We recommend you "buy to open" the CTXS June 30 Calls (XSQFF) for 65 cents or less and "sell to open" the CTXS June 20 Puts (XSQRD) for $1 or more to collect at least a 35-cent credit.

This second CTXS trade has the same fundamentals as the first one. The big difference is by selling the June 20 puts, we now get paid to put this trade on. We collect premium up front and we have a CTXS "lottery ticket" in case something really good happens.

The 52-week low in CTXS is $19. By selling the June 20 puts, our risk is that we may take ownership of this excellent company at the absolute bottom of its valuation range. But given the outlook for the stock and the sector, that's not a bad place to be.

Have a great day trading.


Nick Atkeson and Andrew Houghton
Editors
Options Trader