Monday, May 21, 2012

Shorting CRM Via Bear Call Spreads

Was originally looking to condor these spreads, but couldn't find a good entry point for the call side.  With the stock down today, I'm taking profits to raise cash and look for new opportunities with a little less than 3 weeks left until opex.

BTC CRM June 12 165/170 bear call spreads for ($0.25-$0.15) x 100 x 5 spreads = $50 paid vs. $250 received = $200 profit

Salesforce (CRM) surprised with an earnings beat last week.  Stock started to move back into the gap and almost filled today.  I'm looking for it to retry that fill, at which point I'll price out credit put spreads.

I'm anticipating further market weakness to drag the stock down, but still gave it plenty of headroom with the placement of my short strike above the highs (and resistance) around 160.  Would need a 13% upside move to be unprofitable.

Sold CRM June 12 165/170 bear call spreads for ($1.15-$0.65) x 100 x 5 spreads = $250 premium received


  1. looks like a good level. an alternative would be to wait for some strength and a test/fail of to retake the 50day before initiating credit call spreads

  2. Nice idea. Would've been a great play as it tagged the 50-day perfectly on 5/22.