Big Printin’ – (CRM)

by Dan March 29, 2017 3:04 pm • Big Printin'

After a dismal year in 2016, closing down 13%, vs the Nasdaq closing up nearly 8%, shares of (CRM) are up a whopping 20%, and now down just 3.5% from its all-time highs made last year.

CRM 3yr chart from Bloomberg

Today’s action in the options market appears that at least one trader might be positioning for a breakout in the next couple months. There were two large trades to speak of, first shortly after 1pm when CRM was trading $82, a trader bought 10,000 of the May 75 puts for 81 cents, these puts were marked closing, against 15,000 of open interest. And shortly after 2pm, when the stock was also around $82, a trader bought to open 10,000 June 85 calls for $2.65 vs open interest of 2,000 options. This call position break-evens at $87.65, up nearly 7% from the trading level.

The stock just held its 50day moving average on the past week’s selling and implied volatility is extremely low, making it a good time to close short premium trades like the May 75 puts above and for the other trade, buying June 85 puts at about 25 vol out a few months, is rarely cheaper:

1 year IV30

The next identifiable catalyst will be fiscal Q1 earnings that should fall the last week of May.