Tony Zhang's Salesforce Options Trade

On CNBC's "Options Action," Tony Zhang said that salesforce.com, inc. CRM is getting a little bit ahead of itself and there is a risk of filling the gap down into $218 level. The stock is around 16% above its 20-day moving average and it's usually trading only 4% above its 20-day moving average, so Zhang is looking for a potential mean reversion into the $218 level.

The implied volatility in the name is high, so Zhang wants to sell the November $245 call and buy the November $260 call for a total credit of $5.55. The trade breaks even at $250.55 and Zhang's maximal loss would be $9.45, if the stock jumps to $260 or higher.