MomentumOptionsTrading.com Weekly Wrap 2 New Trades (HERO, LLNW) for 5/30/2014

MomentumOptionsTrading.com Weekly Wrap 2 New Trades (HERO, LLNW) for 5/30/2014

2:12pm (EST)

I have 2 New Trades (covered calls) for the Weekly Wrap today on two companies that are no strangers to the portfolio.  One stock is holding its 50-day MA and there could be a nice move coming over the next month.  The other play is a speculative play on a possible takeover acquisition.

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Buy Hercules Offshore (HERO, $4.50, down $0.05)

Sell to OPEN July 4.50 calls (HERO140719C00004500, $0.30, down $0.05)

Action:  I like shares of HERO at current levels while selling the July 5 calls for 30 cents to lower the cost basis to $4.20.  If the trade is “called away” at $4.50 by mid-July the return will be 7%.

Buy Limelight Networks (LLNW, $2.16, down $0.14)

Sell to OPEN June 2 calls (LLNW140621C00002000, $0.40, down $0.05)

Action:  I like shares at current levels while selling the June 2 calls for 40 cents.  This will lower the cost basis to $1.76.  If shares are called away by mid-June at $2 the return will be 14%.

Apple could take a look at this company as it looks to build out its CDN network.  Limelight has a market cap of just $214 million and would be a great acquisition target for Apple.  There are litigation risks with this trade but I believe the potential to make a double-digit profit over the next month is there.