CleanSpark (CLSK) Might Be a UFO!
I swear I saw a yellow mouse, but before I could examine closer I ended up getting shocked. I think it could be a UFO!
Today's trade is CleanSpark. I was trying to trade it recently, but had to wait until the market took a tumble for it to fill to get the price I wanted. But before I talk about that…
What's the Word on the Street?
Yesterday after the close, Meta and Microsoft posted earnings and investors were impressed. Both stocks went up.
This morning, the PCE (Personal Consumption Expenditures) was released. That’s the Federal Reserve’s preferred inflation gauge. It came back slightly higher than expected (Core 2.8% actual vs. 2.7% expected, Headline 2.6% actual vs. 2.5% expected). Not to mention that the previous month was revised upward. That combined with yesterday’s press conference when Chairman Powell made clear that a September interest rate cut was no sure thing sent markets downward today.
There are more trade deals, frameworks, and extensions happening. Most notably a trade deal with South Korea announced yesterday and an extension for Mexico announced today. Remember that the supposed deadline is tomorrow, so we’ll see how that shakes out for all the other countries that haven’t made deals yet (and markets!). Also, tomorrow is the July jobs report. It will be released in the morning before the opening bell.
CleanSpark (CLSK)
What Is It?
CleanSpark, Inc. is a bitcoin mining technology company, which engages in the management of data centers. Its operations include College Park, Norcross, Washington, Sandersville, Dalton, and Massena. The company was founded by S. Matthew Schultz and Bryan Huber on October 15, 1987 and is headquartered in Henderson, NV. The listed name for CLSK is CleanSpark, Inc. Common Stock.
Why Is It a Possible UFO?
Primarily its current share price relative to its fair value and what other option traders expect are the reasons CLSK could be a UFO.
What About Recent News?
There’s not a lot new specifically for CLSK except that it placed an order for new bitcoin miners to scale up its operations and improve efficiency.
Besides that, crypto has been doing well this year because of more favorable treatment from the U.S. government.
What’s the Current Price?
CLSK has had a good run so far this year. Notably, shares have been up ~34% in the past 3 months and ~4% in the past month. But it’s down ~8% in the past week.
What’s the Fair Value?
I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…
Since CLSK’s most recent earnings report on 05/08/2025, it has received 7 ratings (but 1 was issued again by the same person, so I’m only taking their most recent one) and taking the average, the fair value might be somewhere around: $19.38.
All ratings are a Buy. The lowest price target is $15, while the highest is $25.
What Do Options Traders Think?
Calls are trading over equidistant Puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $10 Put it says $0.23, it’s $0.74 for the equidistant Call at $12.5.
The premium (the credit you receive for executing the trade) is currently less for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go up, rather than down.
How About Volatility?
The IV rank (the purple line) for CLSK (stock price in blue) is currently hovering around 12.26, which is pretty low (IV rank goes from 0-100). This makes short strategies (which are what I prefer) less attractive.
What's the Trade?
My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value.
Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.
CLSK does not offer a dividend, but that’s not a dealbreaker!
It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral.
So if you saw the most recent image above, I already STO (sold to open) 4 contracts of the $10 Put for the September 5th expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.
When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.
What About Alternative Trade Ideas?
- If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
- Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.
Wait…Where Are the Candlesticks? And All the Other Indicators?
I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing.
As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.
Disclosures
- I currently have an open trade with CLSK (as mentioned in this post).
- No trade is a sure thing. There is always risk involved.
- This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.