Don't think that is bad move. Downside protection, CIEN is very likely to be higher in the longer term if you can hold on a drop. I just saw this, so not buying today. One of my rules is to only buy options on up days to get a better (best?) premiums.  ANyway, since I got some shares called last quarter, I'm in holding mode for now with current shares.

Jon,

Thanks for weighing in. Off the top of my head, and I may be wrong about this, but in watching the options so far, as the stock price drops, the amount of premium goes down,

but if one is buying new shares to sell calls on, the % earned may be greater - one can spend less on the shares, and get a greater % return on the bet. That may not be true - because

the bid/ask spread doesn't necessarily mean you'll get the mid-point between them when you sell the calls. Or it might just be my cognitive fogginess at the moment.

It does seem like a decent bet, based, as you note, on long term prospects. But OTOH, one might hesitate based on market valuations. However, CIEN trades at about 29x.

Nvidia, which I also own, rose another 7% today to $495, sporting a 92x PE. Two analysts raised their PTs - one to $500, the other to $550. EArnings are Aug. 19th. Around

August 30th, the CEO will hold an 'events' day, and very likely announce a ship date for their new Ampere GPUs. That and datacenter growth is driving the projections.

But 92X? The low for NVDA in the trailing 12 months is about $160. Is 92X more absurd than 120X? Less absurd than 70X? Their future prospects, like CIEN, I think are

very very good. But it's starting to feel like the dotcom bubble all over again.

The NVDA, AAPL, AMZN's for the world baffle me. They are leaders and at some point I probably should have scuked uit up, but I have usually found it hard to buy at 92x and similar. So I missed all of these except I once held AAPL - sold after it doubled. I think around 50, sold at 100.  I remember thinking, how much more does it have to run?  Now it is ~$450. I don't get it, but I am ok with that. I am doing ok in other stiocks, albeit not 10 and 20-baggers, lol.

I don't follow NVDA closely enough to trade, but I'd be worried over next 0-3 years since AMD looks so strong again. If AMD can compete or exceed NVDA specs it is trouble for that sort of multiple, but if NVDA runs away as they so often have, the multiple is probably worth it.

Stream of consciousness thoughts fwiw.

Sorry for all those typos! I should have reread it right away.  :)

Jon,

On NVDA, I held my breath through earnings yesterday. Beat on revs, earnings, and upped their projections for Q3. Basically static today, one could explain that as either all the good news is priced in, or, on datacenter chips, their growth was 6%, not a 'wowing' number, and the beat was fueled by their acquisition of Mellanox, which was accretive to income. (They get no props for that? Analysts have said it's a brilliant acquisition. And a company buys another in part because it is accretive to earnings. But it's not organic. So argue it either way.) The NVDA strength, and why I continue to hold it, is their lead in AI baked into all kinds of chips - datacenter, and....their graphics cards. I don't believe AMD will be able to touch them in the high end. NVDA will release their nextgen 3000 series cards based on Ampere tech, 7nm, and with the AI they're using, they should be boffo cards. Furthermore, they've been aggressive in breaking into new markets - this was the first quarter in which their datacenter rev outpaced graphics card revs. And they're deep into autonomous vehicle tech, and other AI-enhanced applications. And well run. The founder and CEO saw the opportunity to diversify away from graphics only and did so extremely successfully. They're in serious talks to acquire ARM. Credit Suisse today raised their PT to $530. Analysts are saying that the console upgrade will help them, as PC gamers buy new cards to match the experience of the new consoles. I don't know about that logic - Why drop more money on a card when you can buy a console for about the same price? (Well, for me, it's because I'm married to a mouse and keyboard for most gaming.)

That said, yeah, I can totally understand why buying in here is something that would give one pause. They're priced for perfection. Although, I have also been mulling that once one passes a certain multiple, does it matter? Is 92x different from 127x?  Apple seems to me largely based on future expectations. (They hit a new high today around $467.) They have yet to sell 1 5g phone, yet.....the street is betting on a huge upgrade cycle when they do have the phones for sale. Sell the news when it happens? Who knows?  I guess one could argue that CIEN has great future prospects as 5G gets real. But given that it's only selling around 30x, I guess that's a bargain in this market. 

When does all this fall? Wish I knew.