The Wheel Options Strategy | My NEW Credo Technology (CRDO) Trading Plan 2026 - Options With Ryan

AI-generated source summary

The analysis focuses on CRDO technology, presenting a bullish outlook with a target of $320-$350 based on its upward-trending chart over the past 1.5 years. The stock exhibits positive earnings with a trailing P/E of approximately 70 and a forward P/E of around 30, suggesting potential for value compression. Key financial metrics highlight strong revenue growth of $437M in Q4 FY25 (+107% YoY) and a projected $479M in Q1 FY27, with gross margins around 67-69% and net margins near 50%. The company benefits from AI data center build-outs and hyperscaler customers, with management expecting the optical portfolio alone to drive $800M in FY27 revenue. The analysis suggests a strategy of selling the 30-day, 30-delta put option with a target premium of 2.5% and aiming to collect that premium, holding until expiration or closing around 50% of max profit. The risk management approach involves selling puts above the cost basis, ideally at a strike price above $200, and potentially selling covered calls if assigned, aiming for a risk-neutral or slightly bullish outlook. The presented cash allocation strategy based on VIX levels suggests a 20-25% cash allocation and 75-80% invested at current VIX levels of around 17.

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