DailyPlay – Opening Trade (CRWD) – August 06, 2025

CRWD Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
CrowdStrike Holdings (CRWD) is showing both technical and valuation pressures that point to a short-term bearish opportunity. Earnings are still several weeks away, scheduled for August 27, 2025, which allows for a trade targeting pre-earnings price compression. The stock has recently broken below key support and is demonstrating relative weakness versus the broader software sector. Given its elevated valuation and recent deterioration in price action, a limited-risk bearish options structure expiring before earnings offers an attractive risk/reward profile while avoiding the volatility and uncertainty typically surrounding CRWD’s results.

Technical Analysis
CRWD broke below its $480 support in July and has since retested that level as resistance, confirming a shift in trend momentum. The price has rolled over toward its 50-day and 200-day moving averages, with the 20-day moving average now sloping downward and acting as short-term resistance. The daily RSI near 36 suggests the stock is approaching oversold territory but still has room for further downside, particularly toward the $420 support zone. Volume trends indicate sustained selling pressure, reinforcing the bearish setup ahead of the earnings event.

Fundamental Analysis
From a valuation standpoint, CRWD remains significantly overextended compared to industry norms, leaving it vulnerable if sentiment weakens further. While the company boasts above-average revenue growth, ongoing net losses and negative margins limit the fundamental support that could justify such a premium. Combined with sector rotation away from high-multiple software names, this creates meaningful downside risk in the near term.

• Forward PE Ratio: 127.07x vs. Industry Median 27.66x
  
• Expected EPS Growth: 18.55% vs. Industry Median 11.68%
  
• Expected Revenue Growth: 21.97% vs. Industry Median 9.38%
  
• Net Margins: -4.17% vs. Industry Median 8.59%
  

Options Trade
To capitalize on the short-term bearish bias while controlling risk, consider the Aug 22, 2025, 450/465 bear call spread for a net credit of $5.45. This involves selling the 450 call and buying the 465 call, collecting $545 in premium with a maximum risk of $955. The expiration date is set before the earnings report, eliminating exposure to that event. The trade profits if CRWD finishes below $450 at expiration, aligning with the thesis of continued weakness toward the $420 target zone. The short strike is positioned above current resistance, offering a margin of safety, while the defined risk structure limits potential losses if the stock unexpectedly rebounds. This setup provides a balanced mix of probability and return on capital.

CRWD – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 2 CRWD Aug 22 $450/$465 Call Vertical Spreads @ $5.45 Credit per Contract.

Total Risk: This trade has a max risk of $1,910 (2 Contract x $955) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $955 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Neutral

Relative Strength: 5/10

OptionsPlay Score: 103

Stop Loss: @ $10.90 (100% loss to value of premium)

View CRWD Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View CRWD Trade