Bullish Tilt: CrowdStrike Option Strategy Geared for Upside Gains

CrowdStrike (CRWD) is holding nicely above rising 50 and 200-day moving averages and is a highly rated stock among many analysts.

Today, we are looking at an unbalanced iron condor, with a slightly bullish bias.

This can be achieved by trading more put spreads than call spreads.

As a reminder, an iron condor is a combination of a bull put spread and a bear call spread.

First, we take the bull put spreads. Using the September 18 expiry, we could sell two put spreads with the $185-$180 strike prices. That spread could be sold for around $0.70. Selling two contracts would generate $140.

Then the bear call spread, which could be placed by selling the $230 call and buying the $235 call. This spread could also be sold for around $0.55.

Trading two put spreads for every one call spread gives the trade a slight bullish bias, but also more risk on the downside.

In total, the iron condor will generate around $1.95 or $195 of premium.

The profit zone ranges between $183.05 and $231.95. This can be calculated by taking the short strikes and adding or subtracting the premium received.

The maximum risk is $805 on the put side and $305 on the call side.

If we take the premium ($195) divided by the maximum risk ($805), this iron condor trade has the potential to return 24%.

A stop loss in this case might be calculated based on 25% of capital at risk, so a loss of around $$200.

Below you can see the risk graph showing the profit and loss at expiration and also the T+0 line.

Company Details

The Barchart Technical Opinion rating is a 88% Buy with a Weakening short term outlook on maintaining the current direction.

Long term indicators fully support a continuation of the trend.

Relative Strength just crossed below 50%. The market is indicating support for a bearish trend.

Of the 50 analysts covering CRWD stock, 33 have a Strong Buy rating, 3 have a Moderate Buy rating, 12 have a Hold rating and 2 have a Strong Sell rating.

CrowdStrike is an American cybersecurity company headquartered in Austin, Texas, best known for its cloud-native Falcon platform, which delivers endpoint protection, threat intelligence, and cyberattack response through a single lightweight software agent.

A leader in the endpoint detection and response market, the company has expanded into areas including cloud security, identity protection, and security analytics, serving enterprises and governments worldwide.

Its business model is built around subscription-based recurring revenue, and it operates in a rapidly evolving industry shaped by escalating cyber threats and intense competition.

Summary

Unbalanced Condors are a great way to play a neutral to slightly bullish outlook on a stock.

Please remember that options are risky, and investors can lose 100% of their investment. 

This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.

On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.