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The stars are aligning for Monsanto (MON) as the company should do very well this year due to last year's drought, as farmers try to make up for the lost year. Secondly, the company has agreed to a licensing deal with its rival DuPont (DD) in which the companies agreed to dismiss the various lawsuits between the two companies. And thirdly, the "Monsanto Protection Act" was recently snuck into the federal government's funding bill which enables the USDA to override judges who try to stop Monsanto from selling its genetically modified seeds.

The company is expecting double-digit profit growth in its corn business and as a result increased its guidance in its 2013 Q1 earnings call held on January 8, 2013. The company's most significant quarters, Q2 and Q3, are in full-swing and approaching and we'll find out more about Q2 when the company reports results on April 3, 2013.

Monsanto is well positioned for growth over the next year and the next decade, as the company invests in technology for seed, plant and field. Also, Monsanto's stock price has been on a nice upward trajectory over the last year as shown below:

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With this setting, the company could report robust earnings next week and a corresponding increase in stock price, and as a result a long straddle stock option position is considered. The long straddle stock option position provides a profit if the underlying stock price moves significantly up or down in price. The drawback for the position, is the position results in a loss, and potentially a large loss, if the stock price does not move significantly, so this position should only be considered with "Vegas capital." The long straddle can be entered by purchasing a long put and call option with the same strike price and the same month of expiration.

Using PowerOptions, a long straddle was found for the company with April expiration as shown below:

The position results in a profit if the price of the stock increases to above $110.33 or if the price drops below $99.67. The details for entering the Monsanto long straddle position are shown below:

Monsanto Long Straddle Position:

• Buy 2013 April 105 Put at $2.55
• Buy 2013 April 105 Call at $2.78

A profit/loss graph for one contract of the Monsanto long straddle is shown below:

(click to enlarge)

As shown, for a significantly increasing or decreasing stock price, the position results in an ever increasing profit.

Look forward to your comments below!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

(This is a repost of an article which was posted on 3/15/2013 and was accidentally deleted, the position in the article made a profit of over 100%)

Oracle (ORCL) reported in its Q2 2013 earnings call held on December 18, 2012 that its could-related business segment is doing very well with quarterly revenue of $230 million. Mark V. Hurd, President and Director, reported wins for the company's cloud products which included Abercrombie & Fitch (ANF), Expedia (EXPE), Macy's (M), T. Rowe Price (TROW), United Continental Holdings (UAUA), U.S. Bancorp (USB), Whirlpool (WHR) and Xerox (XRX). Mr. Hurd further noted product wins for its Exalogic Elastic Cloud software with Chevron (CVX), Vodafone (VOD) and Wal-Mart (WMT).

For its software license and cloud related segment, Oracle reported broad-based strength and balance with double-digit growth in all of its regions. Year-over-year quarterly revenues for software licenses and cloud related products for the Americas were up 22%, Asia Pacific up 13% and Europe/Middle East up 12%. Lawrence J. Ellison, CEO, Co-Founder and Director, noted the company's Java business is booming with growth of over 34% for the quarter. Mr. Ellison further commented that the acquisition Sun Microsystems was the most strategic and profitable acquisition that Oracle had ever performed. On a negative note, Quarterly hardware revenues came in at $734 million which represents negative growth of -23%. Mr. Ellison further noted that the company is almost complete with downsizing in its hardware product segment and plans to start growth its hardware business in the near future.

Oracle reported total revenue for the quarter of $9.1 billion which represents growth of 5% year-over-year.

For the company's Engineered Systems product offering, Mr. Hurd noted product wins at China Mobile (CHL), Facebook (FB), Samsung and Time Warner Cable (TWC) and also indicated the company plans to double the Engineered Systems business. Mr. Hurd further noted product wins for its Business Intelligence product Exalytics with Activision (ATVI), City of Chicago, Deloitte & Touche and WellPoint (WLP).

Although Oracle's Price-to-Sales (P/S) ratio of 5 looks expensive, its Price-to-Earnings ratio of 17 looks fair considering the company's prospects for high growth. Oracle's stock price has shown fairly steady price appreciation over the last nine months as shown below:

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With Oracle set to release is third quarter results on Wednesday March 20, 2013 and with the company's prior excellent software/cloud-related performance, the company could report better than expected results. Due to this, a long straddle stock option position is considered for the company. A long straddle returns a profit if a stock price increases or decrease significantly. However, the position experiences a loss, and a potentially a large loss, if the stock price remains stagnant, therefore the long straddle should only be used with "Vegas" capital. The long straddle can be entered by purchasing a long put and a long call option with the same strike price and the same month of expiration.

Using PowerOptions, a couple of long straddle positions for April 2013 expiration were found as shown below:

Since a positive earnings surprise is expected for Oracle, the long straddle using the $36 strike price is selected, as it has the lower break-even price of $37.91. The details for entering the selected long straddle for Oracle are shown below:

Oracle Long Straddle Position:

• Buy ORCL 2013 Apr 36 Put at $0.74
• Buy ORCL 2013 Apr 36 Call at $1.17

A profit/loss graph for one contract of the Oracle long straddle position is shown below:

(click to enlarge)

For a stock price below $34.09 or above $37.91, the position is profitable and for a price between $34.09/$37.91 the position results in a loss.

Look forward to hearing your comments below!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

In golf, one of the most embarrassing things that can happen is to whiff, or completely miss the ball when swinging. In Oracle's (ORCL) Q3 earnings call held on March, 20, 2013, the company whiffed on earnings, as the total revenue reported of $9 billion was flat as compared to Q3 of the prior year. Safra Catz, President and CFO, indicated the whiff was a result of poor sales execution due to a large number of new sales representatives. In the question and answer portion of the call, Larry Ellison, CEO, and Mark Hurd, President, both indicated they did not think the whiff was due to macroeconomic issues. There was some discussion as to the fiscal cliff causing some deals being postponed for North America, but not enough to justify the poor results. Additionally, there was some discussion as to product transitions potentially attributing to the poor results.

New software license revenue was $2.3 billion which was flat year-over-year, cloud revenue was $238 million which was -1% year-over-year. The one bright spot -- software license update and product support had revenue of $4.3 billion which represented an increase of 8% year-over-year. The revenue for software license update and product support represented almost half of the Oracle's total revenue, while nice this is not good, because this segment is basically relying on past performance and is not a good indicator for future results.

Even with the poor results, Oracle had some major wins such as Travelocity, Walt Disney World (DIS), Kaiser Foundation, Office Depot (ODP), CGI Group (GIB), Southwest Airlines (LUV), Dow Chemical (DOW), Union Bank, Renault, National Instruments (NATI) and Lender Processing Services (LPS).

Mr. Ellison claimed the company's new SPARC T5 microprocessor is the world's fastest. Additionally, Mr. Ellison thinks the company will once again see good performance in Q1, after completing the transition to new products in the pipeline.

In a previous article (which I accidentally deleted), it was conjectured that Oracle would report good results and a long straddle was offered as a stock option strategy to consider. Just the opposite situation occurred, but the long straddle can generate a profit if a stock price moves significantly up or down and Oracle's stock price has taken a big haircut as shown below:

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The long straddle position posted in the previous article is now showing a positive profit of about 115%. Oracle's outlook still looks positive with its promising Cloud offering, so with the haircut, this could be a good time to enter a long position for the company. A position worth of consideration is the married put, as it provide for unlimited upside with limited downside. The position profits with an increase in stock price, but doesn't lose much if the stock price takes a hit. The married put position can be entered by purchasing a long put against a long position in the stock.

Using PowerOptions, a number of married put positions were found for Oracle for September option expiration as shown below:

The married put position using the 2013 September 32 strike price look attractive with a maximum potential loss of 5.8%. However, when considering expected dividend payments during the holding time, the maximum potential loss is reduced to 4.8%. The details for entering the Oracle married put position are shown below:

Oracle Married Put Position:

• Buy ORCL (existing or purchased)
• Buy 2013 Sep 32 put at $2.11

A profit/loss graph for one contract of the Oracle married put position is shown below:

(click to enlarge)

For an increasing stock price, the value of the married put also increases. For a stock price falling below the $32 strike price of the put option, the value of the married put position remains unchanged. And, if the price of the stock increases to above the $32 strike price of the put option, then income methods can be applied in order to receive income and reduce risk as taught by RadioActiveTrading.com.

Look forward to hearing your comments below!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.