CrowdStrike Pullback Creates Bullish Options Setup

Cybersecurity name CrowdStrike Holdings Inc (NASDAQ:CRWD) is pulling back to the site of its post-share split low and is nearing the 50-day moving average. Prices are just above post-earning bear gap and could be moving into support now. There is front-month put support at 180-strike with weeklies, though max pain levels are currently set to roll higher into August’s expiration, setting up a potential rally in the next few weeks.

 
Options traders are heavily bearish, leaving ample room for bulls to move in should this sentiment begin to unwind. CRWD sports a 50-day put/call volume ratio of 1.18 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the elevated 95th percentile of its annual range.
 
Options are priced affordably, per CRWD’s Schaeffer's Volatility Index (SVI) of 61% that stands in the 23rd percentile of annual readings. It's worth noting that the security’s Schaeffer’s Volatility Scorecard (SVS) comes in at 90 out of 100, meaning the stock has consistently realized higher volatility than its options have priced in over the past 12 months.
 
Our recommended September call has a leverage ratio of 5.1 and will double on a 21.1% rise in the underlying equity.