CoreWeave (CRWV) Might Be a UFO!
It’s now September which means we’re deeper into pumpkin spice season! To celebrate I weaved a sweater to match my hat and scarf, but could it be a UFO?
I’m still holding onto my previous CRWV trade that proved to be more of a falling knife, rather than the quick rebound trade I had hoped for, but that’s ok! That trade and today’s trade both still have strikes below the current price. Typically I don’t like to hold onto more than 1 trade with the same stock, but since it’s been beaten up so much, I wanted to give it another shot.
What’s the Word on the Street?
The market is currently mixed with the Dow and Russell down and the S&P and Nasdaq up. Last night Alphabet (Google) received a ruling that allowed it to hold onto its Chrome browser. The market took that as a win and a reason for tech stocks to rally today.
In other news, JOLTS (Job Openings and Labor Turnover) survey released showing…
The number of people hired in July totaled 5.31 million, but the increase was almost entirely offset by 5.29 million “separations” —layoffs, job quitters, retirements and so forth.
The layoff rate in the private sector registered 1.3% for the second month in a row, but warning signs might be flashing.
The rate has crept up from a record low of 1% one year ago. From 2010 to 2019, the layoff rate averaged 1.4% each year.
CoreWeave (CRWV)
What Is It?
CoreWeave is a cloud infrastructure company that provides high-performance computing resources optimized for workloads such as artificial intelligence, machine learning, visual effects, and batch processing. The listed name for CRWV is CoreWeave, Inc. Class A Common Stock.
Why Is It a Possible UFO?
Primarily its current share price relative to its fair value and what other option traders expect (maybe) are the reasons CRWV could be a UFO.
What About Recent News?
CRWV has been limping since its most recent earnings, which beat expectations, but showed a steeper loss than analysts expected. That combined with investors scrutinizing AI spending, a deal for Core Scientific that will probably need to be negotiated, and insider selling after the IPO lockout period has hurt the stock price of CRWV.
What’s the Current Price?
I actually took this screenshot yesterday when I originally took the trade, but since the stock has fallen a bit more today, I decided it was still worth writing about.
Despite the great run since its IPO debut, CRWV is down ~27% over the past 3 months, down ~12% in the past month and down again slightly on the week and day.
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 CRWV’s most recent earnings report on 08/12/2025, it has received 7 ratings and taking the average, the fair value might be somewhere around: $124.14.
2 ratings are a Buy and 5 are a Hold. The lowest price target is $65, while the highest is $180.
What Do Options Traders Expect?
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 $92.5 Put it says $8.25, it’s $8.30 for the equidistant Call at $100.
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.
Note: I took this screenshot once the trade was filled. It seems the premiums changed from when I had originally placed the trade, and looking again now, option traders seem to be unsure whether CRWV will move up or down based on premiums.
How About Volatility?
The IV rank (the purple line) for CRWV (stock price in blue) is currently hovering around 5.84, which is very 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.
CRWV 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) 1 contract of the $75 Put for the October 17th 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 open trades with CRWV (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.