A Potential 133% Gain in this Company
As companies move processes to the cloud, services like Salesforce have grown in popularity. But these services can be complex and smaller companies might want to streamline processes with addons available from smaller companies in the field.
NICE inContact is the cloud contact center software leader with a cloud customer experience platform. NICE inContact CXone™ combines best-in-class Omnichannel Routing, Analytics, Workforce Optimization, Automation and Artificial Intelligence on an Open Cloud Foundation.
NICE inContact’s solution empowers organizations to provide exceptional customer experiences by acting smarter and responding faster to consumer expectations. NICE inContact’s DEVone developer program is an extensive partner ecosystem, providing applications from partner companies on the CXexchange marketplace that are designed to integrate with CXone.
The company notes that “NICE inContact is recognized as a market leader by the leading industry analyst firms.” The company helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens.
It estimates that over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, are using NICE solutions.
That makes recent news potentially profitable since there are so many potential users. Business Wire reported,
“NICE inContact, a NICE (Nasdaq: NICE) business, today announced NICE inContact CXone Packages for Salesforce, designed specifically for Salesforce customers.
The new CXone Packages, integrated with Salesforce Service Cloud, provide a suite of cloud native contact center applications that empower agents to consistently deliver exceptional customer experiences and companies to achieve business goals.
CXone Packages for Salesforce add a global carrier-grade voice channel to digital customer interaction channels, in addition to an intelligent routing engine.
Adding CXone intelligent routing for digital channels can improve the customer experience through skills-based routing that combines agent proficiency with customer attributes from Salesforce to find the best customer service agent for each interaction – allowing faster resolution of customer requests, fewer transfers between agents, and options to provide higher levels of service to premium customers.
Agents continue to handle digital channels from within their familiar Salesforce interface, and now with CXone agents will benefit by servicing customer requests they have the skills and proficiency to quickly and successfully resolve.
In addition, CXone Packages for Salesforce extend the Salesforce Lightning Service Console with integrated workforce management, quality management, interaction analytics, and customer feedback applications.
CXone Packages for Salesforce let customers select what they need today, and then grow as their customer expectations and contact center business needs evolve.
- Contact Center Core: adds global carrier-grade voice, self-service IVR, integrated softphone, smart routing for Salesforce digital channels, and advanced call and screen recording.
- Contact Center Advanced: adds workforce management, analytics-powered quality management, gamification, advanced performance reporting, and executive dashboards.
- Contact Center Complete: adds speech and text analytics for customer interactions, and customer feedback survey and analytics capabilities to continuously improve the customer experience.
“Building customer loyalty and advocacy are a must in today’s competitive customer experience economy. NICE inContact CXone Packages for Salesforce give customer service leaders and agents the tools they need to achieve their KPIs – all in their familiar Salesforce desktop,” said Paul Jarman, CEO NICE inContact.
“NICE inContact is focused on providing customers with flexible, affordable, and easy to implement solutions to power exceptional customer and agent experiences.”
The news came as the stock reached new highs.
This move could mark a breakout from a longer-term consolidation.
A Trade for Short Term Bulls
As with the ownership of any stock, buying NICE could require a significant amount of capital and exposes the investor to standard risks of owning a stock.
To reduce the risks of a trade, an investor could purchase a call option. This allows them to benefit from upside moves in the stock while limiting risk to the amount paid for the options. However, buying a call option can also require a significant amount of capital and includes the risk of a 100% loss.
Whenever an option is bought, the maximum risk is always equal to 100% of the amount of spent to purchase the option. Since options cost significantly less than a stock, the risk in dollar terms will usually be relatively small to own an option.
To further limit the risks of the trade, an investor could use a bull call spread. This strategy consists of buying one call option and selling another at a higher strike price to help pay for the cost of buying the first call. The spread strategy always reduces the risk of an options trade.
This strategy is designed to profit from a gain in the underlying stock’s price but has the benefit of avoiding the large up-front capital outlay and downside risk of outright stock ownership. The potential risks and rewards of this strategy are summarized in the chart below.
Source: The Options Industry Council
Both the potential profit and loss for the bull call spread are limited. The maximum loss is equal to the net premium paid when the trade is opened. The maximum profit is limited to the difference between the strike prices, less the debit paid to put on the position.
This strategy could be especially appealing with high priced stocks where the share price and options premiums are often a significant commitment of capital for smaller investors.
A Specific Trade for NICE
Every day, we scan the markets looking for trades that NICE low risk and high potential rewards. These trades are available almost every day and we share them with you as we find them. Now, it’s important to remember these are trading opportunities in volatile stocks.
When we find a potential opportunity, we evaluate it with real market data. But because the trades are volatile, the opportunities may differ by the time you read this. To help you evaluate the current opportunity, we show our math and explain the strategy.
For NICE, the May 17 options allow a trader to gain exposure to the stock.
A May 17 $125 call option can be bought for about $2.72 and the May 17 $130 call could be sold for about $1.22. This trade would cost $1.50 to open, or $150 since each contract covers 100 shares of stock.
The amount paid to enter the trade is the largest possible loss on the trade. This is generally true whenever a trader is creating a debit to enter an options trade. “Creating a debit” means there is a cost to enter the trade. You could create a debit by simply buying puts or calls to open a directional trade.
In this trade, the maximum loss would be equal to the amount spent to open the trade, or $150.
The maximum gain on the trade is equal to the difference in exercise prices less the amount of the premium paid to open the trade.
For this trade in NICE the maximum gain is $3.50 ($130 – $125 = $5; $5 – $1.50 = $3.50). This represents $350 per contract since each contract covers 100 shares.
Most brokers will require minimum trading capital equal to the risk on the trade, or $150 to open this trade.
That is a potential gain of about 133% based on the amount risked in the trade. The trade could be closed early if the maximum gain is realized before the options expire.