CRDO Unusual Options: $4.5M Tech Earnings (Aug 18)
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🚨 CRDO Explodes with $3.5M Institutional Risk Reversal! Unusual Score: 8.0/10 🔥
📅 August 18, 2025 | 🔥 EXTREME Unusual Activity Detected
🎯 The Quick Take
Holy moly! Someone just placed a MASSIVE $3.5 MILLION coordinated options strategy on CRDO (Credo Technology)! 🐋 This isn't your neighbor Bob's Robinhood account - this is institutional money executing a sophisticated risk reversal strategy with perfectly matched 3,000-contract positions on both calls and puts. With CRDO already up 67% YTD and sitting at $118.65, smart money is positioning for continued explosive growth ahead of next earnings on September 3!
🏢 Company Snapshot
Credo Technology Group is a high-speed connectivity solutions provider specializing in: - Active Electrical Cables (AECs) for data center connectivity - SerDes chiplets and optical DSPs supporting 100G to 1.6Tb/s speeds - PCIe retimers for next-gen server interconnects - Key supplier to hyperscalers for AI infrastructure buildout
Recent Financial Highlights: - Q4 2025: Revenue $170M (up 179.7% YoY), beat by $10.4M - FY2025: Record revenue $436.8M (up 126% YoY) - Profitability turnaround: Net income $52.18M vs. $28.37M loss in FY24 - Gross margin improved to 46.8%
📈 YTD Performance Check
CRDO has been on an absolute tear in 2025: - Current Price: $118.65 - YTD Return: +67.28% - Recent Action: Steady climb from $35 lows in April to current highs near $120 - Momentum: Strong uptrend with higher highs and higher lows pattern intact
The stock has nearly DOUBLED since May, riding the AI infrastructure boom wave! 🚀
💰 The Options Tape Breakdown
📊 What Just Happened (Times in EST)
Here's the institutional chess game that unfolded:
| Time | Symbol | Side | Buy/Sell | C/P | Strike | Expiration | Premium | Volume | OI | Size | Spot | Option Price |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 15:23:08 | CRDO | MID | BUY | CALL | $140 | 2025-09-19 | $878K | 3,100 | 603 | 1,500 | $118.65 | $5.85 |
| 15:23:08 | CRDO | MID | SELL | PUT | $100 | 2025-09-19 | $848K | 3,100 | 323 | 1,500 | $118.65 | $5.65 |
| 15:18:53 | CRDO | MID | SELL | PUT | $100 | 2025-09-19 | $636K | 1,600 | 323 | 1,123 | $118.64 | $5.66 |
| 15:18:53 | CRDO | MID | BUY | CALL | $140 | 2025-09-19 | $650K | 1,600 | 603 | 1,123 | $118.64 | $5.79 |
| 14:34:26 | CRDO | MID | BUY | CALL | $140 | 2025-09-19 | $229K | 461 | 603 | 375 | $118.52 | $6.10 |
| 14:34:26 | CRDO | MID | SELL | PUT | $100 | 2025-09-19 | $214K | 430 | 323 | 375 | $118.52 | $5.70 |
Total Premium: $3.455 MILLION across 6 coordinated trades! 💸
🤓 What This Actually Means
Translation for us regular folks: This is a textbook RISK REVERSAL strategy! Here's the breakdown:
- Smart money BOUGHT 2,998 calls at the $140 strike (18% above current price)
- Total call premium paid: $1,757K ($878K + $650K + $229K)
- They SOLD 2,998 puts at the $100 strike (16% below current price)
- Total put premium collected: $1,698K ($848K + $636K + $214K)
- Net cost: Just $59K (they collected almost as much premium as they paid!)
This trader is essentially saying: "I'm SO bullish on CRDO that I'll risk assignment at $100 to get cheap upside exposure to $140+!"
The perfect symmetry (almost identical contract counts) screams institutional execution. This isn't luck - this is conviction! 🎯
🔥 The Unusual Score Meter
Unusual Score: 8.0/10
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EXTREME ACTIVITY DETECTED! 🚨 - This $878K single trade is 183x larger than average CRDO options - Activity in the 99.98th percentile - happens maybe once a year! - Classification: "High net worth institutional max position"
Real talk: We've literally NEVER seen activity this big in CRDO options before! 👀
🎪 Catalyst Calendar
Mark your calendars - here's what's driving this action:
📅 Near-Term Catalysts
- September 3, 2025 - Q1 FY2026 Earnings Report
- Analyst consensus: $0.35 EPS expected (per Seeking Alpha)
- Options expire 16 days AFTER earnings (smart positioning!)
-
AI Infrastructure Expansion - Hyperscale customers deploying AI clusters with 72 GPU configurations
- Demand for high-speed connectivity exploding
- Back-end interconnect densities 10x higher than traditional computing
-
Scale-up networks evolved from 8 GPUs to rack-scale 72 GPU configurations
-
Customer Diversification Wins
- Amazon revenue concentration dropped from 86% to 61%
- Microsoft now 12% of revenue
- xAI (Elon's company) represents 11% of revenue
-
800G Optical DSP Ramp - "Largest ever" design win with major hyperscaler
- 3nm 200G-per-lane DSP technology
- 1.6Tb/s speeds with superior power efficiency
- PCIe Gen6 retimers received certification
📊 FY2026 Guidance Bomb
- Revenue expected to exceed $800 MILLION (85% YoY growth)
- Non-GAAP net margins targeted at ~40%
- 3-4 customers expected to exceed 10% of revenue
- Record FY2025 revenue of $436.8M (up 126% YoY)
🎲 Price Targets & Probabilities
🚀 Bull Case: $140+ (35% chance)
If FY26 guidance of $800M revenue proves conservative and AI spending accelerates, CRDO rockets past the $140 calls. Mizuho's $135 target and strong hyperscaler wins support this scenario.
Analyst Support: 12 Buy ratings, 0 Hold, 0 Sell with price targets ranging from $85-$135
⚖️ Base Case: $110-125 (50% chance)
CRDO consolidates recent gains, delivers solid earnings, maintains momentum. Stock trades sideways to slightly up. Options trader keeps premium from sold puts, small gain on calls.
Q4 2025 revenue of $170M (up 179.7% YoY) shows strong momentum continuing.
😰 Bear Case: $100-110 (15% chance)
If hyperscaler spending slows or tariff concerns materialize, CRDO could test $100 support. Trader gets assigned on puts but has $18 downside buffer from current levels.
💡 Trading Ideas
🛡️ Conservative: "The Premium Collector"
SELL Sep 20 $105 Puts - Collect ~$3.50 premium ($350 per contract) - 11.5% downside protection - Keep premium if CRDO stays above $105
⚖️ Balanced: "The Spread Eagle"
BUY Sep 20 $120/$130 Call Spread - Cost: ~$3.00 per spread - Max profit: $7.00 if CRDO hits $130 - Risk only what you pay, potential 233% return
🚀 Aggressive: "Follow the Whale"
BUY Sep 20 $140 Calls + SELL $100 Puts (Mini Risk Reversal) - Net cost: Near zero (collect put premium to pay for calls) - Massive upside if CRDO explodes - Risk: Assignment at $100 if stock tanks
⚠️ Risk Factors
Let's keep it real - here's what could go wrong:
- Nosebleed Valuation - Trading at 372x trailing P/E (though forward P/E ~63x more reasonable)
- Customer Concentration - Still heavily dependent on a few hyperscalers despite diversification
- Competition - Broadcom and Marvell competing in high-speed connectivity
- Tariff Risk - 25% China semiconductor tariffs could squeeze margins
- AI Spending Pause - Some reports suggest paused data center projects
🎯 Trader's Corner: The Bottom Line
Real talk: This is one of the most bullish institutional bets we've seen all year! 🔥
The smart money just laid down $3.5M saying CRDO continues its monster run through September earnings. The risk reversal strategy is genius - they're so confident, they're willing to buy the stock at $100 (16% below current) to get cheap exposure to $140+ upside.
What I'm Doing: - If you own it: Hold through earnings, consider selling some $145 calls for income - If you're watching: Wait for any dip toward $110-115 for entry - If you're bearish: Stay away - don't fight this institutional momentum
Remember: When whales make moves THIS big with THIS much conviction, it usually pays to swim in the same direction! 🐋
Options involve risk and are not suitable for all investors. This analysis is for educational purposes only and not investment advice. Always do your own research and consult with a financial advisor.
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