Crocs (CROX) is one of my favorite companies and a great stock for income traders when the charts are in our favor.
Shares are rallying following the company’s latest earnings announcement in which Crocs reported record revenue and blew through analysts’ earnings estimates. It also raised its full-year guidance.
As one analyst said after the announcement: “I think we have to get past this notion that Crocs is a fad.”
I couldn’t agree more. Let’s sell a put to capitalize on still-elevated volatility levels.
Just be aware that Crocs only has monthly options. So, if we roll the position to avoid assignment or simply to generate more cash, we will be going out to the December monthly expiration.
Current Stock Price: $80.38
Action: Sell to open CROX Nov Monthly (11/18) 70 Put
Current Option Price: $0.85-$1.05
Recommended Limit: Set your initial limit order at $0.95. You can go as low as $0.80, but please don’t start there and always use limit orders.
Expiration: After the close on Friday, Nov. 18
Potential Rate of Return: 1.4% in 15 days, or 33% annualized, if this option expires worthless