Options Action
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Options Action

Crowdstrike could be the next cloud stock to soar on earnings, say options traders

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Options Action: Looking ahead to Crowdstrike earnings

After Zoom Video's monstrous earnings beat, options traders are betting that Crowdstrike could be the next big winner in this week's deluge of cloud stock earnings. 

The cybersecurity stock has had a wild year thus far, surging more than 175% as companies shift more and more of their workflow into the cloud. Options traders are betting that shift will manifest in big gains when Crowdstrike reports after the bell on Wednesday, even after a 14% rally in Tuesday's session.

"Crowdstrike traded two times the average daily option volume by midmorning, more than seven times by the end of the day. The most active [Sep. 4] weekly options were the 150-strike calls. Those were trading for just over $6," Optimize Advisors CIO Michael Khouw said Tuesday on CNBC's "Fast Money."

The options market is implying a post-earnings move of about 14% in either direction for Crowdstrike, and after Tuesday's close, the stock would need to move only about 9% higher for buyers of those contracts to break even. However, the stock has pulled back after yesterday's big rally, to the point where these traders will need Crowdstrike to hit that implied move on the nose to make their money back. 

Crowdstrike was trading about 5% lower in Wednesday's session.

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