CSCO is another good one for AI Infrastructure:
15x forward earnings and, as you can see on the monthly chart – this is just a slow, steady build for them – though at the top of the range at the moment.
- Still, we’d LOVE to get in at $55 (20% off) so selling 10 CSCO 2027 $60 puts for $3.70 ($3,700) in the STP is an easy play.
In the LTP, we can play as follows:
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- Sell 10 CSCO Jan 2027 $60 puts for $3.70 ($3,700)
- Buy 25 CSCO Dec 2027 $60 calls for $14.40 ($36,000)
- Sell 20 CSCO Jan 2027 $75 calls for $5 ($10,000)
- Sell 10 CSCO Nov $67.50 calls for $3.30 ($3,300)
- Sell 5 CSCO Nov $65 puts for $1.75 ($875)
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That’s net $18,125 on the $37,500 spread so about 100% upside potential but, as with ORCL, the real show is 10 more cycles to collect $4,000 = $40,000 (220%) PLUS we have a year advantage on the short Jan 2027 calls so the spread will be $5-10 wider than this ($25,000 more) and that would be AFTER dropping $10,000 more cash on the short Jan 2027 sales when they come.
Just a crazy money-printing machine!
