NOW Options Analysis - Put Spread Unwind

🛡️ NOW $64M Put Spread Closed - Major Position Unwound Before Earnings! 💰

📅 November 28, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just closed a $64.4 MILLION deep in-the-money put spread on ServiceNow at 11:38:13 AM today! This massive trade unwound 1,950 contracts across multiple strikes ($1,100-$1,160 puts) expiring January 16, 2026 - just 49 days out and three weeks before Q4 earnings on January 29. With NOW trading at $809.64, these deep ITM puts are being closed for massive intrinsic value, suggesting institutional profit protection or position rebalancing ahead of major catalysts.

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📊 Company Overview

ServiceNow, Inc. (NOW) provides software solutions to structure and automate various business processes via a SaaS delivery model:
- Market Cap: $166.55 Billion
- Industry: Services - Prepackaged Software
- Current Price: $809.64
- Primary Business: IT service management, workflow automation, application development platform (PaaS)
- Employees: 26,293
- Market Position: >50% market share in IT Service Management, expanding aggressively into CRM and AI agents

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💰 The Option Flow Breakdown

The Tape (November 28, 2025 @ 11:38:13):

Time	Symbol	Buy/Sell	Type	Expiration	Premium	Strike	Volume	OI	Size	Spot	Option Price	Option Symbol
11:38:13	NOW	SELL	PUT	2026-01-16	$14M	$1,100	760	49	500	$809.64	$289.30	NOW20260116P1100
11:38:13	NOW	SELL	PUT	2026-01-16	$12M	$1,140	510	33	350	$809.64	$329.30	NOW20260116P1140
11:38:13	NOW	SELL	PUT	2026-01-16	$3.9M	$1,120	185	13	125	$809.64	$310.00	NOW20260116P1120
11:38:13	NOW	BUY	PUT	2026-01-16	$31M	$1,160	1.4K	100	875	$809.64	$349.40	NOW20260116P1160
11:38:13	NOW	BUY	PUT	2026-01-16	$3.5M	$1,160	1.5K	100	100	$809.64	$349.30	NOW20260116P1160

Combined Premium: $64.4M across all trades

🤓 What This Actually Means

This is a bear put spread being closed - and it's telling us a lot! Here's what went down:

• 💸 Net cash flow: Paid $34.5M to close long $1,160 puts, collected $29.9M from closing short puts ($1,100/$1,140/$1,120) = Net $4.6M outflow to unwind
• 🎯 Deep ITM positions: All strikes are $290-$350 in-the-money with NOW at $809.64
• 💰 Original position structure: Bought $1,160 puts (875+100 contracts = 975 total), sold lower strikes (500+350+125 = 975 contracts) = perfectly hedged bear spread
• 📊 Intrinsic value capture: $1,160 puts worth $350.36 intrinsic ($1,160 - $809.64), $1,100 puts worth $290.36 intrinsic
• 🏦 Institutional unwinding: This represents 195,000 shares worth ~$158M in notional exposure being eliminated
• ⏰ Timing significance: Closing 49 days before expiration, before January 29 Q4 earnings

What's really happening here:
This trader likely established this bear put spread months ago when ServiceNow was trading much higher - potentially near the 52-week high of $1,198. The spread would have been profitable if NOW stayed below $1,160 at expiration. But with the stock down 21% from highs and trading at $809, both sides of the spread are deep in-the-money, creating a situation where the trader is essentially long stock synthetically. By closing the entire position, they're:

1. Locking in whatever profit remains from the original bearish bet (NOW did fall from $1,198 to $809)
2. Eliminating delta exposure ahead of binary earnings risk on January 29
3. Removing assignment risk - with 49 days left, early assignment on short puts was becoming probable
4. Freeing up capital from the $4.6M margin requirement for the spread

Unusual Score: 🔥 EXTREME (1.76-2.17x z-score, classified as ABOVE_AVERAGE to HIGHLY_UNUSUAL) - While not once-in-a-lifetime, this is 5-15 times larger than typical ServiceNow put activity, happening maybe a few times per year.

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📈 Technical Setup / Chart Check-Up

YTD Performance Chart

ServiceNow has experienced significant volatility this year, currently trading at $809.64. The chart shows the stock reached a 52-week high of $1,198.09 before declining 32.4% to its current level.

Key observations:
- 📉 Major correction: Down 32% from January 2025 peak of $1,198, currently finding support around $800 level
- 💹 Range-bound consolidation: Trading between $780-$840 for several weeks, testing key psychological $800 support
- 🎢 High volatility: Large swings characteristic of high-growth SaaS stocks facing valuation pressures
- 📊 Volume patterns: Recent accumulation near $800 suggests institutional interest at these levels
- ⚖️ Critical inflection point: Stock at crossroads between Q4 earnings on January 29 and 5-for-1 stock split vote on December 5

Gamma-Based Support & Resistance Analysis

Current Price: $812.45

The gamma exposure map reveals critical price magnets and walls around current levels:

🔵 Support Levels (Put Gamma Below Price):
- $810 - Immediate support with 1.05B total gamma exposure (strongest nearby floor!)
- $800 - Major psychological and gamma support at 1.23B gamma (dealers will buy dips here)
- $780 - Secondary support with 456M gamma

🟠 Resistance Levels (Call Gamma Above Price):
- $815 - Immediate resistance with 1.53B gamma exposure (strongest level!)
- $820 - Secondary ceiling at 1.67B gamma (highest total gamma concentration)
- $840 - Extended resistance at 640M gamma
- $860 - Major resistance zone with 864M gamma
- $880-$900 - Upper resistance band at 730-755M gamma

What this means for traders:
The gamma data shows NOW is trading right at critical support ($810) with massive resistance overhead at $815-$820. Market makers holding these positions will hedge by selling stock as price approaches $815-$820, creating natural resistance. The strong support at $810 means dealers will buy dips, but any break below $800 could trigger accelerated selling toward $780. This setup suggests NOW is likely to trade range-bound between $800-$820 unless a major catalyst emerges.

Net GEX Bias: Bearish (8.44B call gamma vs 10.47B put gamma) - Put-heavy positioning creates downside hedging pressure, contributing to range-bound behavior.

Implied Move Analysis

Options market pricing for upcoming expirations:

• 📅 Weekly (Dec 5 - 7 days): ±$28.65 (±3.55%) → Range: $779.46 - $834.72
• 📅 Monthly OPEX (Dec 19 - 21 days): ±$48.07 (±5.96%) → Range: $759.02 - $855.16
• 📅 January 2026 (Jan 16 - 49 days): ±$67.43 (±8.36%) → Range: $739.66 - $874.52
• 📅 Yearly LEAPs (Dec 2026 - 385 days): ±$216.07 (±26.77%) → Range: $578.31 - $1,035.87

Translation for regular folks:
Options traders are pricing in a 3.55% move ($29) by December 5 (stock split vote day!) and a 5.96% move ($48) through December 19 expiration. By the January 16 expiration (when these puts expire), the market expects an 8.36% move in either direction. That's fairly elevated for a mega-cap software stock, reflecting uncertainty around:

1. December 5 stock split vote - Could catalyze retail buying interest
2. $2.85B Moveworks acquisition close expected in H2 2025
3. January 29 Q4 earnings - Major binary event
4. 2025 growth guidance - Market concerned about deceleration from 22% to 19-20%

The massive LEAPs implied move (+26.77% range by December 2026) shows the market pricing in potential for ServiceNow to either break out to new highs above $1,000 or continue consolidating/declining toward $600s based on AI monetization success.

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🎪 Catalysts

🔥 Immediate Catalysts (Next 30 Days)

5-for-1 Stock Split Shareholder Vote - December 5, 2025 (7 DAYS AWAY!) 📊

Special shareholder meeting to approve 5-for-1 stock split announced October 29 with Q3 earnings. If approved (highly likely with management backing), the current $800+ share price would reduce to ~$160-190 per share in early December. This improves accessibility to retail investors and could catalyze buying interest similar to other recent tech stock splits (Tesla, Amazon, Alphabet).

Weekly Options Expiration - December 5, 2025

Coinciding with stock split vote, this weekly expiration has a 3.55% implied move ($779-$835 range). Significant options positioning around $800-$820 strikes creates gamma dynamics that could amplify volatility around the announcement.

December Monthly OPEX - December 19, 2025 (21 days)

Heavy options positioning with 5.96% implied move. This expiration captures initial post-split trading dynamics and year-end portfolio rebalancing flows. Major gamma levels at $800 (support) and $820 (resistance) suggest rangebound trading unless fundamentals shift materially.

🚀 Near-Term Catalysts (Q4 2025 - Q1 2026)

Q4 2024 Earnings Release - January 29, 2026 (62 DAYS AWAY!) 📊

After market close, Wednesday, January 29, 2026, conference call at 2:00 PM PT. This is the most critical catalyst for ServiceNow into Q1 2026.

Consensus Estimates:
- 📊 Revenue: $2.95 billion (21.21% YoY growth)
- 💰 Subscription Revenue: $2.88 billion (21.7% YoY growth)
- 💵 EPS: $3.58 (15.11% YoY growth)
- 🎯 Company Guidance: Subscription revenue $2.875B-$2.88B (21.5-22% YoY)

Key Metrics to Watch:
- cRPO growth trajectory: Guided 21.5% constant currency, down from 26% in Q3 - any slowdown signals growth headwinds
- Now Assist adoption: 44 customers spending >$1M ACV including 6 >$5M - need to see acceleration
- AI agent momentum: Customer wins with new Yokohama platform (AI Agent Studio, orchestrator)
- Federal contract wins: Impact from GSA OneGov agreement (up to 70% discounts driving adoption)
- 2025 full-year guidance: Market expects 19.5-20% subscription growth slowdown - beating this is key
- Foreign exchange impact: $175M headwind on 2025 subscription revenue, $205M on cRPO
- DOJ probe resolution: Status of government contract investigation (Carahsoft partnership)

What to watch: ServiceNow has a strong execution track record with Q3 2024 beating expectations ($2.797B revenue vs $2.743B consensus, $3.72 EPS vs $3.46 consensus). However, at current valuation near ~15x sales, any disappointment in 2025 guidance or cRPO deceleration could trigger sharp sell-off. Conversely, beats on AI product adoption (Now Assist, AI agents) and federal contract wins could reignite bullish momentum.

Moveworks Acquisition Close - H2 2025 (Within 6 Months)

ServiceNow's largest acquisition ever at $2.85 billion in cash and stock, expected to close in second half of 2025. This combines ServiceNow's agentic AI platform with Moveworks' front-end AI assistant and enterprise search technology across 350+ enterprise customers and 5M+ employees. Integration success is critical - adds $100M+ annual run rate immediately but carries execution risk given complexity.

Knowledge 2026 Conference - May 5-7, 2026

ServiceNow's flagship customer conference in Las Vegas with 15,000+ expected attendees. Historically used for major product announcements, this could showcase:
- Moveworks integration roadmap and customer wins
- Next-generation AI agent capabilities beyond Yokohama
- Long-term AI platform strategy and competitive differentiation vs Microsoft/Salesforce
- Customer success stories validating ROI from AI deployments

🤖 Strategic Catalysts (2026+)

Federal Government Contract Expansion

GSA OneGov agreement signed September 2025 provides up to 70% discounts for federal agencies with FedRAMP High/IL-4/IL-5 environments fully operational. This unlocks entire U.S. federal government modernization spend - addressable market in billions over multi-year period. First contract wins expected in Q1-Q2 2026.

AI Agent Ecosystem Maturation

Yokohama platform with thousands of pre-configured AI agents, AI Agent Studio (no-code development), and AI Agent Orchestrator deployed across enterprise customers. First wave of productivity metrics and ROI validation expected in Q1 2026, critical for proving value proposition vs Microsoft/Salesforce approaches.

CRM Market Share Gains

ServiceNow holds 9.21% market share in Customer Service Management vs Salesforce's 60.14%, but growing at 20% YoY vs Salesforce's 8%. Logik.ai CPQ acquisition enhances quote-to-cash capabilities. Fortune 500 CRM displacement opportunities could drive incremental billions in TAM expansion.

⚠️ Past Catalysts (Already Happened)

Q3 2024 Earnings Beat - October 23, 2024

Strong results with $2.797B revenue (22% YoY) beating $2.743B consensus, $3.72 adjusted EPS vs $3.46 consensus. Key highlights: 2,020 customers with $1M+ ACV (14% growth), 96 deals >$1M net new ACV, Now Assist fastest-growing product ever with 44 customers >$1M ACV. Stock initially rallied but has since declined 21% from January 2025 highs on valuation concerns.

Strategic Acquisitions Announced (March-May 2025)

• $2.85B Moveworks (March 10) - AI assistant platform
• Logik.ai CPQ (April 3) - Quote configuration
• Data.World (May 7) - Data catalog/governance

All pending close, creating integration execution risk but expanding AI and CRM capabilities.

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🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and upcoming catalysts, here are the scenarios:

📈 Bull Case (25% probability)

Target: $880-$920

How we get there:
- 🎉 Stock split approved December 5, drives retail buying frenzy (post-split price ~$176-$184)
- 💪 Q4 earnings beat on Now Assist momentum (>50 customers at $1M+ ACV)
- 🚀 2025 guidance exceeds conservative expectations (22%+ subscription growth vs 19-20% feared)
- 🇺🇸 Federal contract wins announced from GSA OneGov agreement (billions in TAM)
- 🤖 Strong validation of AI agent ROI from early Yokohama adopters
- 📊 Moveworks integration progressing ahead of schedule
- 📈 Break through gamma resistance at $820-$840-$860 on sustained buying

Key risks to bull case:
Stock already down 32% from highs - needs multiple positive catalysts to align simultaneously. Gamma resistance at $815-$820 (1.5-1.7B) creates natural ceiling requiring significant buying pressure. Valuation at ~15x sales limits upside unless growth re-accelerates materially.

🎯 Base Case (55% probability)

Target: $780-$840 range

Most likely scenario:
- ✅ Stock split approved December 5 but market reaction muted (already expected)
- 📱 Q4 earnings meet expectations but don't significantly beat (in-line with guidance)
- ⚖️ 2025 guidance confirms 19.5-20% growth slowdown from 22% in 2024
- 🇨🇳 AI product adoption (Now Assist) growing but monetization timeline unclear
- 🔄 Trading within strong gamma support ($810) and resistance ($815-$820) bands
- 📊 Market digests Moveworks integration timeline, waits for Knowledge 2026 in May for catalyst
- ⏰ Range-bound consolidation into January earnings, then re-evaluation

This is the most likely outcome: Stock has already corrected 32% from highs, appears to be finding support at $800 level where institutions accumulated. The put spread close suggests traders expect rangebound behavior rather than major directional move. Gamma dynamics ($810 support, $815-$820 resistance) reinforce this view. This is the trade's sweet spot - the trader who closed the put spread likely expects exactly this scenario and wanted to eliminate delta exposure ahead of binary events.

📉 Bear Case (20% probability)

Target: $700-$760

What could go wrong:
- 😰 Q4 earnings miss or weak 2025 guidance disappoints (growth deceleration to <19%)
- 📉 cRPO growth slows materially below 21% (Q3 was 26%), signals pipeline weakness
- 🤖 AI product monetization questioned - Now Assist adoption not translating to revenue
- ⚖️ DOJ probe into government contracts escalates or results in penalties
- 💰 Moveworks integration challenges emerge (cultural, technical, financial)
- 🏢 Competitive pressure from Salesforce ITSM and Microsoft Dynamics intensifies
- 📉 Break below $800 gamma support triggers accelerated selling toward $780, then $750
- 🌊 Broader SaaS multiple compression on macro concerns

Key support levels:
Strong put gamma at $810 ($1.05B) and $800 ($1.23B) should limit downside unless fundamentals deteriorate significantly. Implied move suggests $759 lower bound for December expiration. Below $750, next major support at $700 psychological level.

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💡 Trading Ideas

🛡️ Conservative: Wait for Post-Split Clarity

Play: Stay on sidelines until after December 5 split vote and observe post-split trading dynamics

Why this works:
- ⏰ Two major binary events in next 60 days (split vote December 5, earnings January 29) create excessive uncertainty
- 💸 Gamma walls at $815-$820 resistance and $810 support suggest limited immediate upside
- 📊 Stock already down 32% from highs - waiting for confirmation of $800 floor prudent
- 🎯 Post-split dynamics unknown - could attract retail buyers or create volatility
- 📉 If earnings disappoint on January 29, better entry likely at $750-$780 levels

Action plan:
- 👀 Watch December 5 split vote outcome and initial post-split trading (first week crucial)
- 🎯 If stock holds $800 post-split and shows accumulation, consider entry on dips to $780-$800
- ✅ Wait for January 29 earnings to confirm AI monetization progress and 2025 guidance
- 📊 Monitor analyst reactions and institutional positioning changes

Risk level: Minimal (cash position) | Skill level: Beginner-friendly

⚖️ Balanced: Post-Earnings Call Spread

Play: After January 29 earnings, sell bull call spread targeting gamma resistance

Structure: Buy $840 calls, Sell $880 calls (March 20, 2026 expiration)

Why this works:
- 🎢 IV crush after earnings makes options cheaper - buy after volatility drops
- 📊 Defined risk spread ($40 wide = $4,000 max risk per spread)
- 🎯 Targets gamma resistance zone at $840-$880 where stock likely faces selling pressure
- ⏰ 111 days to March expiration gives time for Moveworks integration progress and federal contract wins
- 📈 Captures upside if earnings beat and guidance strong, without unlimited risk
- 💰 Post-split stock price (~$168-$176) more accessible for spreads (5x more contracts per $ invested)

Estimated P&L (adjust after seeing post-earnings IV):
- 💰 Potential to collect ~$15-20 credit per spread (net debit of $20-25 per spread)
- 📈 Max profit: $1,500-2,000 if NOW at/above $880 (post-split $176) at March expiration
- 📉 Max loss: $2,000-2,500 if NOW below $840 (post-split $168) - defined and limited
- 🎯 Breakeven: ~$860 (post-split ~$172)

Entry timing: Wait 1-2 days post-earnings for IV to fully collapse, confirm no negative surprises

Risk level: Moderate (defined risk) | Skill level: Intermediate

🚀 Aggressive: Iron Condor Around Expected Range (ADVANCED ONLY)

Play: Sell iron condor targeting $780-$840 range through December expiration

Structure:
- Sell $840 calls / Buy $860 calls (upper spread)
- Sell $780 puts / Buy $760 puts (lower spread)
- Expiration: December 19, 2025 (21 days)

Why this could work:
- 💸 Collect premium from elevated IV before split and year-end
- 🎯 Strikes outside current gamma walls ($810 support, $815-$820 resistance) but within implied range
- 🔄 Betting on continued rangebound behavior similar to what the $64M put spread close suggests
- ⚡ If NOW stays $780-$840 (base case 55% probability), keep significant premium
- 📊 Gamma dynamics support rangebound thesis - dealers will defend $800 and cap rallies at $820

Why this could blow up (SERIOUS RISKS):
- 💥 LIMITED PROFIT, SIGNIFICANT RISK - Max gain capped at credit received, max loss is spread width minus credit
- 😱 Stock split vote December 5 could trigger unexpected volatility spike in either direction
- 🚀 Positive split reaction + momentum could push above $860 quickly (loss on call side)
- 📉 Disappointing economic data or sector rotation could break $760 support (loss on put side)
- ⚠️ Year-end volatility unpredictable - institutional rebalancing, tax-loss harvesting create whipsaws
- 💰 Requires managing both sides simultaneously if stock moves against either wing

Estimated P&L:
- 💰 Collect ~$8-12 total credit per iron condor (both sides combined)
- 📈 Max profit: $800-1,200 if NOW stays between $780-$840 at December 19
- 📉 Max loss: ~$800-1,200 per condor if NOW breaks above $860 or below $760 (spread width $20 - credit received)
- ⚠️ Loss accelerates quickly once breached - must actively manage or close early

Risk level: HIGH (defined but substantial risk both directions) | Skill level: Advanced only

⚠️ WARNING: DO NOT attempt this trade unless you:
- Have experience managing multi-leg options through binary events (split vote)
- Can actively monitor position daily and adjust/close if breached
- Understand mechanics of iron condors and assignment risk
- Have sufficient capital to handle max loss scenario ($1,000-1,500 per condor)
- Accept that profit is limited while requiring active management

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⚠️ Risk Factors

Don't get caught by these potential landmines:

• ⏰ Dual binary events within 60 days: Stock split vote December 5 and Q4 earnings January 29 create compounding volatility risk. Either event could gap stock 5-10% in unexpected direction. Historical precedent shows splits can be "sell the news" events.

• 💸 Growth deceleration confirmed in guidance: 2025 guidance implies slowdown to 19.5-20% subscription growth vs 22-23% in 2024. If Q4 earnings confirm or worsen this trend, valuation compression likely continues. Market has limited patience for deceleration at ~15x sales.

• 🤖 AI monetization remains unproven: While Now Assist has 44 customers at $1M+ ACV (fastest-growing product ever), this is still <3% of 2,020 total $1M+ customers. Path to converting AI innovation (Yokohama platform, thousands of agents) into proportional revenue growth unclear. Risk of over-investment without margin expansion.

• 🏢 Intensifying competitive pressure: Salesforce's ITSM launch directly attacks ServiceNow's >50% market share core business. Microsoft Dynamics leveraging Office 365 installed base creates pricing pressure. AI agent capabilities commoditizing as every vendor releases similar features.

• ⚖️ Integration execution risk on largest acquisition ever: $2.85B Moveworks deal plus simultaneous Logik.ai and Data.World integrations strain resources. Cultural integration of 500-person Moveworks team challenging. Technology platform consolidation complexity high. Any stumble impacts credibility.

• 🏛️ Government contract scrutiny and DOJ probe: Investigation into ServiceNow's government contract award and former US Army CIO hiring creates uncertainty. While management stated "no Q3 impact," federal business represents significant growth opportunity (GSA OneGov agreement). Regulatory issues could limit upside potential.

• 📊 Gamma ceiling creating natural price cap: Strong call gamma resistance at $815-$820 (1.5-1.7B total gamma) means market makers will sell into rallies to hedge, creating natural price ceiling. Would need sustained institutional buying or major positive catalyst to break through multiple resistance layers ($820-$840-$860).

• 🌊 Macroeconomic headwinds and FX pressure: $175M foreign exchange impact on 2025 subscription revenue, $205M on cRPO. Enterprise IT budget constraints in complex macro environment. Long sales cycles (6-12 months) amplify economic uncertainty. Rising rates pressure high-multiple SaaS valuations.

• 📉 Stock already down 32% but could go lower: While correction from $1,198 to $809 significant, no guarantee this is the bottom. If Q4 disappoints or 2025 guidance weak, further multiple compression toward $700-750 possible. Analyst consensus targets around $1,100-1,174 suggest upside, but these often lag fundamental changes.

• 💰 Put spread close signals institutional caution: This $64M position unwind suggests sophisticated players eliminating delta exposure and assignment risk ahead of binary events. When institutions derisk rather than adding to positions, it signals uncertainty about near-term outcomes. Position size indicates major fund/institution reducing exposure.

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🎯 The Bottom Line

Real talk: Someone just closed a $64 MILLION deep in-the-money put spread that was betting on ServiceNow staying weak. The fact they're unwinding this position at $809 (rather than riding it to January expiration) tells us they're satisfied with whatever profit remains from the original bearish bet, but more importantly, they don't want delta exposure through the upcoming binary events (stock split December 5, earnings January 29).

What this trade tells us:
- 🎯 Sophisticated trader expects NOW to trade rangebound $780-$840 through January (base case)
- 💰 They're satisfied eliminating a complex position that carried assignment risk and margin requirements
- ⚖️ Rather than betting on direction (bearish or bullish), they're choosing to derisk ahead of volatility
- 📊 Similar to closing a hedge when the hedged risk has materialized - NOW already down 32% from $1,198 peak

If you own NOW:
- ✅ Consider holding through stock split vote December 5 - could catalyze retail buying (post-split price ~$162-168 more accessible)
- 📊 Strong gamma support at $810 and $800 provides near-term floor for existing positions
- ⏰ Set mental stop at $780 (next major support level per implied move data) to protect gains
- 🎯 If Q4 earnings on January 29 beat with strong 2025 guidance (22%+ growth, accelerating Now Assist), $880-920 becomes realistic 3-month target
- 😰 If earnings disappoint or guidance confirms 19-20% slowdown, expect retest of $750-780 levels

If you're watching from sidelines:
- ⏰ December 5 split vote and January 29 earnings are your key dates - mark calendar and wait for clarity
- 🎯 Post-earnings pullback to $780-800 would be attractive entry point for long-term holders (gamma support)
- 📈 Looking for confirmation of AI monetization (Now Assist growth), federal contract wins, and Moveworks integration progress
- 🚀 Longer-term (6-12 months), Knowledge 2026 conference in May and federal AI contract ramp are legitimate re-rating catalysts
- ⚠️ Current valuation (~15x sales) requires multiple positive catalysts to align - margin of safety improving but not compelling yet

If you're bearish:
- 🎯 Wait for earnings before initiating short positions - risk/reward poor with strong $800-810 gamma support
- 📊 First meaningful breach target at $780 (put gamma), major breakdown below $750 opens $700
- ⚠️ Watch for cRPO growth deceleration below 20%, AI monetization disappointment, or DOJ probe escalation as potential catalysts
- 📉 Put spreads ($800/$780 or $780/$760) offer defined-risk way to play downside if base case breaks
- ⏰ Timing critical: Shorting into stock split could trigger squeeze; post-earnings offers cleaner setup

Mark your calendar - Key dates:
- 📅 December 5, 2025 - 5-for-1 stock split shareholder vote (7 days away!)
- 📅 December 19, 2025 - Monthly options expiration, post-split dynamics settling
- 📅 January 16, 2026 - Expiration date for these $64M put spread trades (49 days)
- 📅 January 29, 2026 - Q4 FY2024 earnings report after market close (62 days away!)
- 📅 May 5-7, 2026 - Knowledge 2026 conference in Las Vegas (major product announcements expected)
- 📅 H2 2026 - $2.85B Moveworks acquisition expected close

Final verdict: This is a "reduce risk ahead of volatility" signal from institutional money. The $64M put spread close at $809 (down 32% from $1,198 highs) suggests traders are comfortable taking whatever profit remains rather than gambling through two major binary events in 60 days. That doesn't mean NOW crashes or rallies sharply - it means the risk/reward for complex derivatives positions is unclear with stock split and earnings approaching. Be patient, wait for December 5 split dynamics to play out and January 29 earnings to provide clarity. The longer-term catalysts (AI agents, federal contracts, Moveworks integration) are 3-6 months away, giving plenty of time to establish positions at better risk/reward setups.

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The unusual score reflects this specific trade's size relative to recent history - it does not imply the trade will be profitable or that you should follow it. Stock splits, earnings, and acquisition integrations create binary event risk with potential for significant gaps either direction. Always do your own research and consider consulting a licensed financial advisor before trading.

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About ServiceNow, Inc.: ServiceNow provides software solutions to structure and automate various business processes via a SaaS delivery model with a $166.55 billion market cap, operating in the Services-Prepackaged Software industry with 26,293 employees.