DailyPlay – Opening Trade (ANET) – December 11, 2024

ANET Bullish Opening Trade Signal

Investment Rationale

Arista Networks (ANET) recently broke above its $105 resistance level, signaling strong momentum and potential for further gains toward our $115 target. Despite trading at a forward PE ratio of 44x, higher than peers, Arista justifies this premium with impressive net margins of 40.29%, far exceeding the industry average of 8.23%. Additionally, EPS and revenue growth projections of 17.54% and 18.29% surpass the industry averages of 14.13% and 6.5%. Trading at a 38% discount to peers, Arista presents significant upside potential given its superior profitability and growth.

ANET – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 13 ANET Jan 3, 2025 $105/$110 Call Vertical Spreads @ $1.50 Debit per Contract.

Total Risk: This trade has a max risk of $1,950 (13 Contracts x $150) based on a hypothetical $100,000 portfolio normally risking 2%. We suggest using 2% of your portfolio value and divide it by $150 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher off recent support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 5/10

OptionsPlay Score: 134

Stop Loss: @ $0.75 (50% loss of premium)

View ANET Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View ANET Trade