What to do with Ciena now…

Flattish to down open early here this morning.  Since nobody cares about Greece’s sovereign debt problem or the US budget crisis this week, maybe some macro economic news in Estonia was softer than expected today and we could focus on it.  Maybe a report out of Singapore about their savings rate increasing again should get us panicked tomorrow.

Then again, let’s continue to try to focus on what matters instead.  Speaking of which, yesterday in the closing hour, I’d bought some very high-risk Ciena calls because they were due to report this morning and as I’d mentioned at the time — sure was a lot of Ciena negativity (Cienagativity?) heading into the report.  The report is out and it’s pretty good, especially for those bulls who were looking for some margin expansion from the synergies of the major Nortel optical acquisition.  Margins are the main reason the stock is up today — the topline was just okay.  Then again, with as much negativity as there was around Ciena heading into the report, maybe “just okay” is good enough to stimulate this pop today.

At any rate, Ciena is indeed up more than 17% as I type this.  The October calls we were buying yesterday are up double or more in value in less than one day’s action.  And I’m selling them down.  One of my old mentors used to always tell me, “Always remember that a trade is a trade is a trade.”  Meaning that you don’t want to confuse a trade with an investment.  We bought these calls as a trade and the trade worked out so let’s lock it in.  I’m keeping only about 1/5 of the calls I’d bought yesterday along with the core common stock position in Ciena that I plan on holding for the longer term.

Rock on.