GoPro's found a floor and here's how to play it: Trader

The only thing crazier than GoPro videos has been the performance of the company's stock.

After rising 200 percent from the June 2014 IPO price, GoPro's shares have lost more than half their value since topping out in early October. But one trader who relies heavily on both the charts and the options market to make his trades says despite the volatility, the camera maker's stock is bottoming out.

"We're starting to see some consolidation at the $40 level. And I think it's interesting right here," Andrew Keene said Monday on "Trading Nation."

The founder of the Keene on the Market website points out that if "you take a look at a daily chart, we go from the IPO price of about $30 [per share] then the stock starts to move up in a series of higher highs and higher lows. Then it got up to the [all-time] high of about $96 [per share] and it rolled over."

Cyran Cunha | GoPro | Facebook

But according to Keene, "there's massive support at that IPO price of around $30."

Curiously enough, while GoPro is a "high-momentum, high-beta" name, prices of its options have fallen of late, and are now at their lowest point since last September.

Still, Keene is loath to pay up for GoPro calls and instead is using an options strategy that mitigates his costs. Specifically, he is buying the January 2016 50/60 call spread for $2.60, while simultaneously selling the January 2016 30/20 put spread for an equal amount.

The trade is most profitable if GoPro hits $60 per share by January and represents a low-cost bet that the stock will retrace all its year-to-date losses.

"If we look at it on expiration in January 2016," said Keene, "I have a break even between $30 and $50. If the stock is below $30 I lose money, but anything above $50 is pure profits."