I have long been a fan of Crocs (CROX) – both its shoes and its income-generating potential. We’ve traded the stock successfully numerous times over the past few years.
Today, I want to put on an earnings play of sorts. While the company is not expected to announce until early February, the stock is up sharply today after management upped its guidance for the fourth quarter and full year.
Due to strong consumer demand, the company now expects to deliver 53% revenue growth for the full year. That’s impressive and shows Crocs is in a good position to navigate a potential recession.
Given the big move up in shares today and the fact that the stock is volatile, I am recommending a silly put that is roughly 10% out of the money. I hope to close early, thus boosting our annualized rate of return.
Current Stock Price: $122.36
Action: Sell to open the CROX Jan Monthly (1/20) 110 Put
Current Option Price: $0.75-$0.85
Recommended Limit: Set your initial limit order at $0.80. You can go as low as $0.65, but please don’t start there and always use limit orders.
Expiration: After the close on Friday, Jan. 20
Potential Rate of Return: 0.7% in 10 days, or 27% annualized, if this option expires worthless