ADCT - ADC Telecom Update

We executed a trade for the December 15 puts not long before the close. ADC sharply lowered EPS guidance for all of next year to as little as 53c vs estimates of $1.01! That's a very large miss and will likely result in some analyst downgrades in the morning since there are 8 buys and 9 holds on the stock. Adding insult to injury, sequential sales are going to be 15% lower in the first quarter. Right now the stock is down 55-cents which brings the aggregate decline for the day down to 4%. Previous gap down support, as seen in the chart below, has occurred in the mid-$12 range, and that's likely to be the worst case scenario for tomorrow. It is this stock chart's recent history of gap downs, along with analysts warning of sagging fundamentals which tempted us to jump into the puts.

The next step is the 5 pm conference call with analysts.