Oracle Stock Tumbles on Higher Capex and Equity Raise - Shorting ORCL Puts Works

Oracle Corp. (ORCL) stock fell after its fiscal Q4 June 10 earnings release, showing negative free cash flow (FCF), despite higher operating cash flow. It expects a 25% higher capex ($70 billion vs. $56 this past fiscal year ending May 31) for the next fiscal year, as well as a new $20 billion equity raise, as reported by CNBC.

As a result, one of the only ways investors may be able to make money with ORCL is to sell short out-of-the-money (OTM) put options. The market has pushed up put option premiums so high that they are worth shorting for the high yields they provide. This article will describe that play.