How You Could Make 92.3% if CRWD is Up or Down

​June 2nd, 2020 How You Could Make 92.3% if CRWD is Up or Down Dear Reader, Yesterday, we looked at a Daily Price Chart of Zscaler, Inc., noting the stock's 50-Day EMA is trading above the 100-Day EMA signaling a bullish trend. For today's Trade of the Day we will be looking at an On Balance Volume chart for CrowdStrike Holdings, Inc. stock symbol: CRWD. Before breaking down CRWD's OBV chart let's first review which products and services are offered by the company. CrowdStrike Holdings, Inc. provides cloud-delivered solutions for next-generation endpoint protection in the United States, Australia, Germany, India, Romania, and the United Kingdom. It offers 11 cloud modules on its Falcon platform through a software as a service subscription-based model that covers various security markets, such as endpoint security, security and IT operations, and threat intelligence to deliver comprehensive breach protection even against today's most sophisticated attacks. Confirming a Price Uptrend with OBV The CRWD daily price chart below shows that CRWD is in a price uptrend as the current price is above the price CRWD traded at five months ago (circled). The On Balance Volume chart is below the daily chart. On Balance Volume measures volume flow with a single Easy-to-Read Line. Volume flow precedes price movement and helps sustain the price uptrend. When a stock closes up, volume is added to the line. When a stock closes down, volume is subtracted from the line. A cumulative total of these additions and subtractions form the OBV line. On Balance Volume Indicator ● When Close is Up, Volume is Added ● When Close is Down, Volume is Subtracted ● A Cumulative Total of Additions and Subtractions form the OBV Line Volume flow precedes price and is the key to measuring the validity and sustainability of a price trend. We can see from the OBV chart below that the On Balance Volume line for CRWD is sloping up. An up-sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure . Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend. So, On Balance Volume is a simple indicator to use that confirms the price uptrend and its sustainability. The numerical value of the On Balance Volume line is not important. We simply want to see an up-sloping line to confirm a price up trend. Profit if CRWD is Up, Down or Flat Now, since CRWD's OBV line is sloping up and the stock will likely rally from here, let's use the Hughes Optioneering calculator to look at the potential returns for a CRWD call option spread. The Call Option Spread Calculator will calculate the profit/loss potential for a call option spread based on the price change of the underlying stock/ETF at option expiration in this example from a 10.0% increase to a 10.0% decrease in CRWD at option expiration. The goal of this example is to demonstrate the 'built in' profit potential for option spreads and the ability of spreads to profit if the underlying stock is up, down or flat at option expiration. Out of fairness to our paid option service subscribers we don't list the option strike prices used in the profit/loss calculation. The prices and returns represented below were calculated based on the current stock and option pricing for CRWD on 6/1/2020 before commissions. Our price target for CRWD is 101.95 per share. Beginner's Guide to Stunning Profits Download Your Copy Now! 92.3% Built in Profit Potential For this option spread, the calculator analysis below reveals the cost of the spread is $260 (circled). The maximum risk for an option spread is the cost of the spread. The analysis reveals that if CRWD is flat or up at all at expiration the spread will realize a 92.3% return (circled). And if CRWD decreases 10.0% at option expiration, the option spread would make a 92.3% return (circled). Due to option pricing characteristics, this option spread has a 'built in' 92.3% profit potential when the trade was initiated. Option spread trades can result in a higher percentage of winning trades compared to a directional option trade if you can profit when the underlying stock/ETF is up, down or flat. A higher percentage of winning trades can give you the discipline needed to become a successful trader. The Hughes Optioneering Team is here to help you identify winning trades just like this one. Interested in accessing the Optioneering Calculators? Join one of Chuck's Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade. Trade High Priced Stocks for $350 With Less Risk One of the big advantages to trading option spreads is that spreads allow you to trade high price stocks like Amazon, Google, Netflix or Apple for as little as $350. With an option spread you can control 100 shares of Apple for $350. If you were to purchase 100 shares of Apple at current prices it would cost about $30,000. With the stock purchase you are risking $30,000 but with an Apple option spread that costs $350 your maximum risk is $350 so your dollar risk is lower with option spreads compared to stock purchases. Chuck's Inner Circle Trading Service Chuck is offering special pricing for his Inner Circle Trading Service for Trade of the Day subscribers. You can start receiving hand-picked trades from Chuck today! Just call Brad at 1-866-661-5664 or 1-310-647-5664 to join and use the code "Optioneering VIP" to receive special pricing! Wishing You the Best in Investing Success, Chuck Hughes Editor, Trade of The Day Have any questions? Email us at dailytrade@chuckstod.com How to Trade Options Like a Champion is Available Now! Grab Your Free Copy! Unsubscribe Investment Software Inc 22C New Leicester Hwy #117 © 2020 Tradewins Publishing. All rights reserved. The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the "Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Legacy Publishing, LLC ("Legacy") a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk and is not appropriate for everyone. 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