Salesforce.com, inc. (NYSE: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.
