Welcome to Extreme Investor Network, where we provide valuable insights and unique information for investors looking to navigate the world of finance. Today, we are diving into the aftermath of a massive IT outage that has left investors and airline travelers reeling, with cybersecurity giant Crowdstrike (CRWD) taking the blame.
As a savvy trader, I see this unprecedented situation as an opportunity to capitalize on the heightened volatility in the market. CrowdStrike shares have been hit hard, presenting a prime opportunity to potentially acquire shares at a discounted price while generating income.
In times of volatility like this, options can be a useful tool for expressing a view on the market. I believe that cybersecurity will continue to be a prominent theme for global investors, and I aim to take advantage of the elevated option premium in CrowdStrike.
Here’s the trade I’m making: Selling a Put Spread. I sold the regular expiration 8/16/24 $300 put for $14.00 and bought the regular expiration 8/16/2024 $250 put for $3.50. This put spread allows me to collect $10.50 per one lot spread, with CRWD trading at roughly $307.50 when the trade was executed.
By buying the lower-priced strike, I am protecting against the potential for further downside in the event of a larger crisis impacting CrowdStrike’s business. While I do not foresee this happening, it’s crucial to define risk in every trade.
It’s important to note that all opinions expressed here are solely mine and do not necessarily reflect those of CNBC or its affiliates. This content is provided for informational purposes only and should not be considered financial, investment, tax, or legal advice. Before making any financial decisions, always consult with a qualified advisor.
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