/Cisco%20Systems%2C%20Inc_%20magnified%20logo-by%20Pavel%20Kapysh%20via%20Shutterstock.jpg?ssl=1 "Cisco Systems Stock Is Treading Water – How to Use Puts and Calls to Play CSCO")
By Mark R. Hake, CFA
Publication Date: 2025-12-26 14:55:00
Cisco Systems, Inc_ magnified logo-by Pavel Kapysh via Shutterstock
Cisco Systems, Inc. (CSCO) generated strong free cash flow (FCF) in Q3, and there is every indication that it will continue. But CSCO stock has been flat. Shorting out-of-the-money puts and buying in-the-money calls are two good ways to play CSCO.
CSCO stock closed at $78.02 on December 12, which is close to a month ago on November 26 ($76.07). Moreover, based on a survey of 15 analysts by AnaChart.com, it could be worth $90.39, or over 15% higher.
In my Barchart article on Nov. 14, 2025, it makes sense to short OTM puts for income. For example, I discussed selling short the $75.00 put option expiring Dec. 12 for $0.86, i.e., a 1.15% one-month yield.
If CSCO takes time moving higher, it might make sense for long-term investors to repeat this trade. Moreover, they can use that income to buy in-the-money (ITM calls. Let’s look at these…
