Put Options on ALLT on 1/8/2013

Allot Communications (ALLT) develops, markets, and sells intelligent solutions to optimize and monetize over-the-top Internet traffic for fixed and mobile broadband networks, and large enterprises. Its portfolio of hardware platforms and software applications use its proprietary deep packet inspection (DPI) technology to transform broadband connections or pipes into networks that can manage data traffic and deploy value-added services.

The company offers traffic management systems, including Allot Service Gateway platform, a carrier-grade line of DPI-based platforms for broadband optimization and revenue generation in fixed and mobile networks; and Allot NetEnforcer that inspects, monitors, and manages network traffic by application and by end-users. 

The word on the Street is that the company will miss its earnings and lower prices are expected for this stock. Note the bearish flag formation.

52-Week Trading Range:  $13.46 - $29.05

Last Trade:  $13.58

Here is the option trade:

Buy One February $15 put option (ALLT130216P00015000) at $2.00

Maximum Profit: $11.58 if stock goes to zero by expiration date

Maximum Loss: $2.00 if stock goes above $15 by expiration date

Trade Buy 1 February $15.00 Put at $2.00 For a net debit of $2.00 Profit/Loss Analysis Breakeven at $13.00 Maximum profit is unbounded Maximum loss is ($200.00) at strike of $15.00 Closing Summary Sold 1 February $15.00 Put at $0.80

Position closed on 2/15/2013 at price of $0.80 with a -60.00% loss in 37 days.

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