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Generating income with an options strategy on Oracle before earnings



The software sector has been struggling this year as stock investors have been focusing more on the technology sector, such as semiconductors and semiconductor equipment. However, Oracle, one of the top three largest U.S. based software companies, has been outperforming the S & P Software and Services index, with its cloud services driving bullish momentum. With Oracle reporting earnings next week on June 11, now may be the perfect time to capitalize on the potential growth of this $340B software giant.

Technically, Oracle is showing strength as it sits above both its 50-day and 200-day moving averages, with a Relative Strength (RSI) reading of just 58, indicating that it is not overbought. Oracle’s 52-week and all-time high is $132, a level that could be retested in Q3. In the event that it does not, it may be a good opportunity to add to a position in Oracle at a lower price for the long term.

To take advantage of Oracle’s potential growth, an options strategy can be implemented to create income. A credit spread can be created by selling the $120 out-of-the-money put, buying the $125 call, and selling the $130 call. This strategy allows an individual to collect $2.50 per one lot, with the potential to own the stock at $117.50 if it goes lower before expiration. On the flip side, if the stock closes above $130 before Labor Day, the upside call spread can fill out and the investor can potentially make another $5.00 per one call spread owned.

As AI investors potentially look to book profits and rotate out of popular tech stocks, the battered-n-bruised software sector may present an opportunity for investors to buy into an outperforming name like Oracle. With its strong performance and continued growth in cloud services, Oracle may be a standout choice for investors looking to capitalize on the growth potential in the software sector. By staying nimble and utilizing options strategies, investors can potentially maximize their returns and take advantage of Oracle’s bullish momentum.

In conclusion, Oracle’s upcoming earnings report and technical strength present a compelling opportunity for investors to capitalize on the growth potential of this software giant. With a credit spread options strategy, investors can create income and potentially profit from Oracle’s movement higher. As the software sector continues to lag behind other tech sectors, Oracle’s outperformance makes it a standout choice for investors looking to diversify their portfolio and maximize their returns in the current market environment. By staying informed and strategic with their investments, investors can potentially benefit from Oracle’s bullish momentum and long-term growth prospects.

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