Salesforce.com, inc. CRM is reporting earnings on Wednesday and Tony Zhang said on CNBC's "Options Action" it is going to be another strong quarter for the company.
The stock has been trading in a range for most of the year, but it managed to break out above the range in the last couple of days. Zhang expects to see a continuation of the move higher after the earnings and he thinks the stock could reach $270 or $280.
To make a bullish bet, Zhang wants to buy the October $260/$280 call spread for a total cost of $6.80. The trade breaks even at $266.80 or 4.17% above the closing price on Friday. If Zhang is right and Salesforce moves to $280, the trade is going to reach its maximal profit of $13.20.
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