A Cautious Trade on Red Hat

Red Hat (RHT) will release its earnings report after the bell today, and it should hold the interest of many. Don't even try to argue fundamental valuation here. Since it is a "cloud" company, measurements such as P/E, PEG, price to book, price to sales, heck, pick just about any of them, don't matter.

Of course, I am being sarcastic, but that does seem to be the case with cloud-related names. Still, I have my concerns on this one into earnings. Price is hugging support here, and that can set up for a nice volatility position. October options are pricing in an 11% move by expiration, but I don't think I would want to hold any trade until expiration....411 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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