Cisco Systems, Inc. (CSCO) generated strong free cash flow in Q3, with potential for growth. CSCO stock remains flat, but analysts predict a potential value of $90.39, over 15% higher. Shorting out-of-the-money puts and buying in-the-money calls are recommended strategies for investors.

Shorting OTM CSCO puts can yield income immediately. For example, selling the $75.00 put option expiring Dec. 12 for $0.86 resulted in a 1.15% one-month yield. Investors can repeat this trade if CSCO stock moves slowly higher, using income to buy in-the-money calls for potential upside.

Investors can buy in-the-money CSCO calls, such as the $77.50 call option expiring July 17, 2026, with a midpoint premium of $6.75 per contract. By shorting CSCO puts for income, investors can minimize the net cost of purchasing call options, offering a leveraged way to play CSCO with potential returns of up to 32.3% annually.

Read more at Barchart: Cisco Systems Stock Is Treading Water